IR35 is a term used to denote United Kingdom tax legislation, which is designed to tax "disguised employment" at a rate similar to regular employment.

In this context, "disguised employees" means a worker that receive payments from a client via an intermediary and whose relationship with their client is such that had they been paid directly they would be employees of the client.

Before IR35 was introduced, workers who owned their own companies were allowed to receive payments from clients direct to the company and to use the company revenue as would any small company. Company profits could be distributed as dividends, which are not subject to National Insurance payments. Workers could also save tax by splitting ownership of the company with family members in order to place income in lower tax bands.

For more detailed information on IR35, please visit the HM Revenue & Customs website