As previously announced, the fourth series of the political satire will feature the former opposition sharing power with a third party.
"Nicola and Malcolm are in opposition now," Iannucci told ShortList.
"Peter Mannion and his coterie are in government, but Mannion now has to share an office with the third party.
"And there's a storyline that runs throughout the whole series now, rather just for the individual half-hour episodes."
He added of introducing a coalition government into the show: "It's great, just trying to put people working in the office together who don't really have the same views.
"And also a smaller party desperately trying to show that they've managed to get something through, and being foiled, was a really great dynamic.
"Within the coalition, this third party we have are known colloquially as 'The Inbetweeners'."