Portsharbourflyer, I'm not aware of having any "free and frank exchanges of views" with you over tax but you may well have done so with my friend Whirlybird!
However, in the rotary world, self-employed helicopter pilots are reasonably commonplace. This does not negate the tax rules simply because those employment structures do not exist within the fixed wing world.
It is true that one of the criteria of self-employment is whether the self-employed can be told how to do his or her job by the person who contracted his or her services. Obviously, as a restricted instructor, the mechanism must be in place for a Chief Instructor to tell that person how to do the job. In reality, HMR&C are usually more pragmatic than that and understand that the six "self-employed" criteria may not be fulfilled in the first year or so of business i.e. working for several clients, using own tools and equipment etc.
I speak not as an instructor but as an accountant!
Cheers
Whirls (not to be confused!)