I agree with TLG, the PCG should attack this ruling with the fury of God's own thunder (and I'll be posting in the PCG fora later). The agency and client should be sued for employment rights and every benefit that goes with it.
Great attention should be drawn to the fact that HMRC looked at the upper contract too and every Press outlet in the land should be educated as to why the two, seperate, commercial contracts shouldn't be used to penalise an legitimate business based on a gray, wooly law that has no solid basis and changes at the whim of whomever attempts to interpret it on behalf of HMRC.