The problem is that we are trying to build our domestic round up in our local area and these guys are in everybodies faces with leaflets and are putting a bit of a spanner into the works.
I know 100% that they aren't legit as I know the guy personally.
Tread carefully. Just because someone is on the sick, it doesn't necessarily follow that he's working illegally. Someone can work and legitimately claim a low level DLA. Re tax. He has 3 months to register after starting up and won't have a tax liability until profits exceed a certain amount (£6k - £7k?). As for insurance, public liability insurance isn't a legal requirement.
So I'm just saying to tread carefully. If you are going to put the mockers on him, it might be better to hold off until he's been trading for 3+ months - by which time he is supposed to have registered the business. At the moment, he may not be doing anything illegal. Of course this does depend on the details of his sick claim.
Knowing him personally doesn't count as proof to the authorities of course. What you know and what can be proven may be totally different.
I don't normally trouble myself about stuff like this unless someone undercuts my work by fiddling. However, it is fair to say that too much of this can push the rates down generally.