The UK had a rule that gave small employers a £4,000 discount on national insurance.
Sketchy large employers like G4S responded by setting up tens of thousands of "Mini umbrella companies" [1] with directors in the Philippines, each company employing only a handful of people - allowing G4S to benefit from the £4,000 discount tens of thousands of times.
Sadly, exempting small operations from regulation isn't a simple matter.
If it was something we wanted to punish, it needs claw backs and draconian fines plus piercing the corporate veil when those companies are suspected of it. Usually though, there's little downside to abusing the system, so the risk/reward is badly skewed.
To reinforce your argument, in the linked article GFS claim that they weren't responsible for the tax avoidance. The recruitment companies they subcontracted out came up with this wheeze.
Complex corporate structures enable plausible deniability. The CEO of GFS probably didn't know what was happening, but also probably didn't want to know whilst enjoying the low fees charged from the recruiters.
Sketchy large employers like G4S responded by setting up tens of thousands of "Mini umbrella companies" [1] with directors in the Philippines, each company employing only a handful of people - allowing G4S to benefit from the £4,000 discount tens of thousands of times.
Sadly, exempting small operations from regulation isn't a simple matter.
[1] https://www.bbc.co.uk/news/uk-57021128