Why was IR35 Introduced?

In the 1980s and 1990s it had became common practice for workers in some sectors - particularly IT, engineering and construction, where sub-contracting is common - to use an intermediary and avoid paying a significant amount of tax and National Insurance Contributions (NICs).

Towards the end of the 1990s, the then Inland Revenue and Treasury calculated that over £300m in tax and NIC revenues were being lost to the Treasury by the practice of working through intermediaries, or what has also become known as freelance contracting.

So IR35 was introduced.
The legislation also covers family run or husband and wife companies where both spouses own a significant share in the business and income is shared between them.  IR35 particularly applies when only one spouse is responsible for completing the fee-earning work.