Invoice paid through shares.

[woohoo]

A while back I did a bit of work for a client that was having problems. The client said they could not pay my invoice but offered me shares in their company. I didn't think the shares would be worth anything so the accountant wrote it off as bad debt.

Anyway, now the client wants to buy back the shares. Not decided on selling them but how would this income be reported? Would I just add it to my sales/profit, then corp tax would apply? Would I need to tell HMRC that it's related to a bad debt write off? Can I just take the cash in my private bank account and blow it on the ponies?

And yes I will ask my accountant.

[Lance]

And yes I will ask my accountant.

how does he want to pay?
How are the shares listed with companies house?

If cash, and if the shares don't exist on your company balance sheet, and companies house is ambiguous, I'd just trouser it.

IANAL (or accountant).

[BrilloPad]

As long as you tell no-one, you can trouser the cash.

So don't go posting about it anywhere. No posts on internet forums.

[woohoo]

As long as you tell no-one, you can trouser the cash.

So don't go posting about it anywhere. No posts on internet forums.

I'm asking for a friend of course. And only posted on here and HRMC forum so should be ok.

[Lance]

I'm asking for a friend of course.

It's my friend who'd trouser it of course.

[BrilloPad]

I'm asking for a friend of course. And only posted on here and HRMC forum so should be ok.

Perfect. So who are the shares registered to? Yourself or the your company?

Opppss. I mean to our friend or to his company?

[woohoo]

Perfect. So who are the shares registered to? Yourself or the your company?

Opppss. I mean to our friend or to his company?

Well i had thought they where registered to my friends company but actually on checking its registered to my friend.

[SimonMac]

IANAL/A but you would need to work out the CGT on the Shares, but if the total value is less than £11,100 there would be nothing to pay

[Lance]

Well i had thought they where registered to my friends company but actually on checking its registered to my friend.

"so no corp tax just CGT to worry about" is what your accountant might say.
You can still trouser the cash if he pays you cash as companies house don't see the transfer value just the transfer.

CGT has a £11k threshold anyway so being honest may be the same as trousering.
Capital gains tax allowances and rates - Capital gains tax explained - Tax - Which? Money

[WordIsBond]

Yeah, don't just trouser the cash, these things have a way of coming back to bite you and it isn't worth it. You are getting money you didn't expect, that's a win even if you have to pay some of it in tax. If you just keep it and don't do it right, you might end up losing it all and worse if HMRC catch you at it. Tax avoidance is often the smart thing to do, but tax evasion is always stupid.