Yes, it is legal to give contractors more benefits than industry standard (that is, no benefits). On the contractor end, they may end up losing some favourable

Yes, it is legal to give contractors more benefits than industry standard (that is, no benefits). On the contractor end, they may end up losing some favourable tax status, as while they are a contractor on paper, they are working full-time for a single client and should report income as a normal salaried full-time employee (which is the case in the UK). That's not the employer's problem.