TC09681 - [2025] UKFTT 01333 (TC)

A common feature of these engagements is that the end-client required the individual to be engaged via an umbrella company. Individuals seeking to engage an umbrella company entered into transactions involving Moir and Jarvis. This seems to have occurred even when an individual was already director of a company that could have acted as an umbrella company.

Moir informed relevant individuals that they should tell their employment agency that Moir would be the relevant umbrella company. Moir emailed individual SH on 3 May 2018:

On 9 October 2019, Moir emailed individual CKC in response to an enquiry about whether Moir would work with a named employment agency:

Individual CKC stated (in response to HMRC’s enquiries) that Moir was the umbrella company she used for her engagements. The employment agency who placed Individual SH provided him with a project schedule which named Moir as the “Umbrella Company”.

However, in the arrangements under consideration here, the entity that engaged individuals seeking an umbrella company was not Moir but Jarvis, a company which had been incorporated in Mauritius in 2016. (Mr Bontempo has stated in his witness statement that Jarvis may have moved to the Seychelles in 2018. Although it may explain the absence of a response to HMRC’s 2020 correspondence, Jarvis’s precise location does not affect these proceedings before the FTT.)

Moir asked the individual to complete with Jarvis the relevant onboarding procedures (completion of an application form, signing a disclaimer, and provision of identity confirmation, et cetera). The documents in the bundle show that each of the nine individuals for whom there are details, entered into a contract of employment with Jarvis.

There were (at least) two different types of payment arrangement offered by Moir: a “standard PAYE” model and an “annuity” model. The annuity model was also described by Moir as “the Jarvis Solution”. I am satisfied that the “annuity model” and “the Jarvis Solution” are the same arrangements, and that they are the same as what HMRC describe as the “Jarvis International Annuity arrangement” that is the subject of these proceedings.

The fact that there are (at least) two options is demonstrated by an email from Moir to individual CKC sent on 18 September 2018. In this email Moir explained:

Individuals who had agreed to use the annuity model, received an offer letter from Jarvis with an employment contract and an assignment schedule.

Clause 8.2 of the employment contract specified that the individual would be paid “basic pay”. This is defined in the contract as the “appropriate salary as outlined in the Assignment Schedule”. In the email of 2 May 2018 to individual SH (set out above), the “basic pay” was the £15,000, also described as the “small portion of the fees received”.

To enable the individual to receive more than just the “basic pay” out of the fees paid by the end-client for their services, each individual also entered into a grant option agreement with Jarvis. This was executed as a deed.

The recitals to this deed set out that Jarvis wished to “make an arm’s length investment with a party with which it has a working relationship”, i.e. the individual, and that the individual would grant to Jarvis “the right to enter into an annuity in accordance with this Deed”. The recitals also set out that both Jarvis and the individual were keen to “ensure that no inadvertent liability to UK tax under ITEPA or ITTOIA arises as a result of the nature of their collateral working relationship”.

Under Clause 2(a) of the deed, Jarvis agreed to make payments (of an unspecified amount) to the individual “at its own discretion from time to time and that these shall be by way of consideration for having received the Grantor’s Grant”. The “Grantor’s Grant” is defined as being an undertaking by the individual to enter into the annuity agreement in the schedule to the deed. The terms of that annuity agreement were that the individual would pay to Jarvis yearly payments which were ten per cent of the aggregate of the payments that Jarvis had paid to the individual from the signing of the deed to the date that the annuity agreement was entered into. Thus, the agreement between the individual and Jarvis was that Jarvis would make unspecified payments to the individual and, once the annuity agreement had been entered into, the individual would, each year, pay Jarvis ten per cent of the total payments Jarvis had made. In theory therefore, if Jarvis had paid an individual £90,000 and the events which triggered entry into the annuity agreement occurred, that individual would be obliged to pay Jarvis £9,000 per year, every year, for life.

However, there were further terms that had to be met before an individual entered into the annuity agreement. In particular, clauses 2(c) and 2(d) of the deed.

Clause 2(c) provided that the individual would only enter into the annuity agreement “once [Jarvis] has paid to the [individual] the additional fee of £10,000 and which is expressed in writing as being made under this sub-paragraph (c) of this Agreement”. HMRC have stated in their written submissions that they are unaware of any fee of £10,000 ever having been paid by Jarvis to any individual. Clause 2(d) provided that the individual would only enter into the annuity agreement “on the first date (‘the Grant Date’) which falls (i) after a period (commencing on or after the date this Agreement is entered into) of 300 consecutive days during which no Grantee’s Payments were made by Jarvis; or (ii) if later, the date on which the condition in sub-paragraph (c) above is first met.”

Therefore, provided Jarvis did not pay £10,000 to the individual expressly under Clause 2(c) then, even if there was a period of 300 consecutive days on which Jarvis did not make a payment to the individual, the individual would not enter the annuity agreement. I am satisfied that the terms of the deed put relevant circumstances entirely within the control of Jarvis. Provided Jarvis did not pay £10,000 to an individual expressly under Clause 2(c), no individual would ever enter into an annuity agreement.

I have set out how I understand the arrangements worked but this is not how Moir described the arrangements to individuals seeking an umbrella arrangement. An example of how Moir described to individuals how the annuity model worked, is set out in an email from Moir to individual SH sent on 2 May 2018. In this email, Moir stated:

I do not consider Moir’s description of the arrangements, as giving Jarvis (or an end-client) “the option to pay pension contributions in advance”, to be an accurate summary of the agreements made between Jarvis and an individual.