Aviation is a funny business where many (not all) clubs exploit young keen and eager pilots desperate to log hours and jump to the airlines. This is a mutually exploitative relationship normally with a good turnover so nobody gets exploited for too long.
Club gets good income from trial lessons and instructor logs hours and eventually lucks out.
Unfortunately the rest of the world operates slightly differently in that most people want to earn a decent income and have some written terms of engagement with benefits (pension etc). Most organisations are happy with this concept and are able to pay said benefits.
I would like to see these existing tax rules enforced so that some shoestring clubs fail with the better more law abiding ones remaining. Good news for self employed instructors and employed (but only if you really are self employed as per normal tax interpretation).