Hi - Im hoping someone can please give me some guidance.
I currently work for a startup and as we are cash tight we want to pay one of our consultants with shares. Should we issue shares or share options and should they invoice us personally or through their company? Reason being as if they invoice us through their company and we settle with shares, they will get taxed on that income but they themselves do not have the money to then pay over to HMRC for the tax element as they have not received any cash. Therefore if we issued them share options what would the accounting treatment be on their side, would it still have to go through their P&L and therefore be treated as taxable income? Their company is set up for vat on the cash accounting method, could this be applied to the treatment of that income move it to the balance sheet untill the shares have been paid out and then recogonise the income in the P&L (this does not seem right but I thought i ask )?
Also instead of them invoicing us through their company but them doing it personally this would then fall under IR35 and Ive have a whole lot of other issues to contend with on my side or is there another suggestion I am missing.