@#%$ work for permie?

Tell him to look at his permanent employer's terms & conditions. Most companies put something in to stop this from happening...

He doesn't have to tell them, but they might get suspicious if his tax code changes...

I have a friend who is changing jobs at the end of the year, he is/will be permanently employed. He asked me a few questions about contracting as he has been asked to consider doing some work for someone other than his employer.

He wanted to know if it was worth setting up a limited company if the most he can expect to achieve through the contract is £10K per annum?

As an aside would it be worth me acting as a middle-man in this situation; the person would then pay me and I would pay my friend. I don't know if this is necessarily a good idea or not - perhaps it would help my position with the tax man? What complications are there, and would my friend have to do anything special? Could I just pay him without employing him?