As you don't know my real name and hence my ICAEW membership number, I shouldn't be struck off for giving erroneous advice!!
I would reckon that the Revenue would have a very good case to say that that example constitutes employee status. The school would be in deeper do-do than the instructor!
I would like to hear the school's argument for self-employed (other than employer's NIC avoidance!)
Cheers
Whirls