HMRC introduced IR35 in 2000 with the main aim of combating tax avoidance. It was believed that many self-employed individuals were in fact engaged in ‘employment activities’, albeit they had their own limited company.
The key issue here is when self-employed, the tax and National Insurance treatment is different to that of an employee. For the purposes of this article, many of these people are categorised as Personal Service Companies (PSCs). Read this post