Well you know and I know that everybody knows whether they are SE or on PAYE.
The question comes down to what an employer has to do to protect himself from somebody who decides they "misunderstood".
A colleague of mine recently sacked an employed salesman over expenses fraud - he was claiming his private mileage on business. This was disallowed in his contract. The salesman won at the tribunal by claiming that nobody explained to him the difference between business and private mileage
Cost to the employer was £26,000. In fact the employer had top notch legal advice all along, paid for by his insurer, so this was no amateur doing it.
A SE person should have
no job security whatever; basically this means no employment contract except perhaps a purely commercial one e.g. a purchase order covering the goods/services supplied.
One of the other indicators is whether the contractor is using his own equipment (good) or using equipment belonging to the company (bad).