Introduced in April 2000 in the UK, the Intermediaries Legislation, or IR35, is aimed at contractors who work for clients via intermediaries.
It was created to ensure that contractors pay their taxes and National Insurance contributions as employees rather than as self-employed contractors.
Before its enactment, some contractors were using intermediaries such as limited companies to ease their tax burden and National Insurance contributions. This denied the UK government tax revenue an did not make them happy.
Here is a detailed look at IR35 and its legal implications: