In accordance with the Inland revenue tax rules for expenses, individuals that have been working on a project for greater than 2 years, it would be deemed their permanant place of works, and then would be subject to payment of Tax.
In order to ensure that the individuals do not become disadvantaged by the tax burden, should the Contractor wish to pay this on their behalf, would this be covered under the schedule of costs components via “meeting the requirements of the law”
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I have tried to get further more specialist advice on this, but they have not responded so here is my view based solely on what you say.
Given that, from what you say, the tax burden falls on the employee, it seems to me that the Contractor is not the one who has to pay it to meet the requirements of the law : it is the employee.
If this is the case, then it is not a Defined Cost and the Employer is not liable to pay the Contractor these costs. Note all my caveats !