I bought shares in a company for £21,000 this was made up of £10,000 cash and £11,000 contracting work - hours billed but no money exchanged hands. Owner demanded shares back and has paid £10,000 csh but refusing to pay out further monies unless I provide an invoice for the hours. Do i have to provide invoice as these are separate transactions?
Hello my name is ***** ***** I am happy to help you today. Do you mean £10k cash and £1K contracting work as it states £11K contracting work in the question.
no I meant £21,000 shares in the company. This was made up of £10,000 cash and the other £11,000 was made up of freelance work which was combined. After approx two months the relationship broke down to which he demanded the shares back.
Ok was there any written contract in place which governed this arrangement?
he has given me £10,000 in cash but is refusing to give the rest unless I invoice him for "work done"
i foolishly believed him, hes my brother in law
i have emails that allude to this
Ok so you have emails that set out the agreement? Were the emails clear that you had to invoice for the further £11K shares?
no, it was agreed i would complete several projects as freelance and this would work towards my buy in
Were those projects completed?
as this was months ago, does him buying the shares back not count as a seperate transation?
Hi as I understand it he has not bought the shares back as he has not paid your for the work?
he signed over shares in exchange for cash and work done
Ok but to be clear has he had the shares back but only paid you the cash back and not a sum in respect of the work you did?
sorry, to be honest Im asking on behalf of my hubby :(
he got involved in my brothers buisness and its gone horribly wrong. I m just trying to find out roughly where we stand or if we have to go along with his requests
yes, he gave back the cash only
Ok so presumably you want payment now for the work done, i.e. the value of the remainder of the shares?
Just so I understand what is your reluctance in handing over invoices?
His reluctance is as I understand - the work was done and the value put towards the shares.
Sorry I'm not clear what you mean, are you saying you are happy to provide invoices?
The share have now been bought back - should this not be a seperate transaction. ie he owes£11,000 for the remainder of the shares price
the way hubby sees it - work was done and combined with cash shares were bought.
Ok the difficulty you have got is that your only recourse in law would be to sue him in breach of contract if he does not pay you the amount due for the shares. If a court were to look at the transaction they would see that you paid part in cash and part of the money you are owed is in connection with work you have done. A court would say that if the work had been done then you ought to be able to produce evidence (by way of invoices) for the work. This might be an invoice showing the exact value of the shares if that was what was agreed.
the shares have now been sold back as a seperate transactoin so they should be paid in cash.
I do not think that the court would see it as 2 separate transactions.
I am also not clear why issuing invoices presents you with any difficulty if the work has been done.
Ultimately it is up to you if you want to issue the invoice. If you do not and he does not pay you then you would have to sue him in breach of contract.
hubby was seeing them as seperate transactions therefore didnt want to be taxed for the work when the issues was the shares being bought
A court would require evidence that the work has been done by way of invoices as part of the payment for the shares is for the work.
Well I don't think HMRC would see it that way.
plenty of evidence of work done. currently not in dispute.
fair enought, was trying to work out if it was meant to be taxed seperatly
I think he will need to speak to a specialist tax adviser to see if the £11, 000 is subject to normal income tax. I think it will be but an accountant may know a loop hole.
As your brother in law won't pay without invoices I don't see a way round issuing them particularly given the fact that the only recourse will be the court which would expect to see an invoice.
If you have any further questions please do ask.If I have answered your question I would be grateful if you would take the time to rate my answer. Thank you and all the best.
NO problem, I hope you can resolve this. I would be grateful if you would please take the time to rate my answer as I am not otherwise credited for my time.
Please do come back to me in the future if you need to.