In the UK someone would start a company, and be an employee of that company with a wage, and make themselves the only shareholder, and then an accountant would say "pay yourself some dividends now".

At least that's what people used to do, but I guess it's been stopped now.

We have a similar entity here in the States, it is called and S-Corp. It is designed for single owner businesses and does allow the owner to dodge some tax burden. Specifically the double taxation on income that a single owner would receive if there where under the rules of a C-Corp as well as some unemployment and FICA.

Nope, it's still standard practice.

You're still going to be paying at least 20% corporation tax on the profits though and then probably 22.5% on the dividend itself.

I'm pretty sure this practice has not been stopped.

I think I'm getting confused IR35, which made contracting less attractive.