[russell_h]

What is the rationale for the lower tax rate?

I'm mostly curious because in the US it is somewhat the opposite - employers are required to pay a tax for every employee, so if you are self-employed your tax rate actually goes up.

[davidgerard]

Because they pay your umbrella company, something something corporate magic.

I think the real reason is that the tax system is biased to the already well off.

[tlarkworthy]

yeah, you get the money out the umbrella company via dividends rather than salary.