" It really doesn't make sense to tax someone as an employee when they don't get the benefits of full employment."
Can you explain why this is please? Our tax system is mostly trying to be based on tax paid being related to how much you earn, not the details of the contract between you and the company paying you. Surely what benefits you are / aren't getting are something you negotiate when agreeing on the T&Cs and the rate rate? Should employees earning the same pay different rates of tax depending on whether they've negotiated 30 or 60 days of paid holiday a year?