We are a UK Ltd company with 2 directors. We have a business bank account set up. We have spoken to lawyers and managed to obtain all necessary documentation. It's an exciting time!
The investment amount is not huge, but is important for our future.
I am in the process of looking for an accountant, but until then we are in the dark on this one. The investor wants to send the money over now, and we want to accept! But if the investor say deposits £1,000 into our business bank account, do we have to pay tax on that?
How do we declare it on tax returns? We obviously don't want to pay tax on it, does it count as income because the investor is receiving 10% of shares in return?
No, it is not income. You are directors - before you get sued your ass out, please at least get the basics. You owe yourself participating into a beginner course for running a business. Heck, we learned reading a balance sheet in school.
You account for it as equity deposit, which goes into your assets (1000 pound) and liability (from investors, 1000 pound), no income / Expense.
There are different ways to do this from the investor's point of view, with different tax implications etc. Both you and your investor should seek professional advice.