AI agents for business finance: what they can and can't do
What AI agents can do in bookkeeping, close, collections and compliance today, where a person must stay in charge, and how to judge a product.
The short answer
Shares offered instead of cash are still payment for your work, and HMRC can tax them when you receive them, not just when you sell. If you are an employee or director, the employment-related securities rules apply; as an independent freelancer the shares are likely to count as business income at their market value, which for an unlisted Nigerian startup is hard to pin down. Any later gain on sale may fall under Capital Gains Tax, with a £3,000 annual allowance.
Nigerian startups short on cash often offer freelancers equity: "2% for building the MVP", or a smaller fee plus shares. It can be a good deal if the company grows. It can also leave you with a tax bill on something you cannot sell, in a company you cannot easily check. This guide covers how to assess the offer, the UK tax points, and what paperwork to insist on.
First: what exactly is being offered?
| Offer | What you get | Questions to ask |
|---|---|---|
| Shares now | Ownership from the day of issue | Which class? Voting? Is it registered with the Nigerian company registry? |
| Option to buy shares later | A right, not shares | Exercise price, expiry, what happens if you stop working with them |
| Shares that vest over time | Shares earned in stages | Vesting schedule, what happens to unvested shares |
| A promise of "equity" with no paper | Nothing enforceable | Ask for a written agreement before you start |
Ask for the company's capitalisation table, showing who owns what, and check how many shares exist. Two per cent of a company that will raise several rounds is likely to become a smaller percentage over time.
Valuing the offer
There is no market price for shares in an unlisted Nigerian startup. Useful reference points are the price paid by any recent investor, the valuation in a recent funding round, or the price in a convertible note or similar instrument. Without any of these, treat the shares as worth very little now and value the cash you are giving up instead. Example only: if your normal fee is £6,000 and the founder offers £3,000 plus 1% of the company, ask whether you would pay £3,000 for 1% today. If not, the trade is not in your favour.
UK tax when you receive shares
If you are, or become, an employee or director
HMRC's employment-related securities rules apply where the right or opportunity to acquire shares is available by reason of an employment. Under the deeming rule in s.421B(3) ITEPA 2003, as described in HMRC's manual ERSM20210, shares made available by the employer or someone connected with it are treated as acquired by reason of employment. If the startup appoints you a director, or you move from freelancer to employee, these rules are likely to apply and can bring an Income Tax charge, and in some cases National Insurance, on the value of the shares.
If you stay an independent freelancer
If you are not an employee or office holder, shares received for your services are likely to be treated as part of your business income, at their market value when you receive them. We could not open HMRC guidance stating this for self-employed people specifically, so ask an accountant before you agree, especially if the value could be large. The awkward result is tax payable in pounds on shares that pay nothing and cannot be sold. Agreeing a modest, documented value at the time, supported by any recent investment price, helps both you and the company.
UK tax when you sell
GOV.UK says you may owe Capital Gains Tax when you sell or otherwise dispose of shares at a profit, depending on whether your total gains exceed your allowance for the year. The annual tax-free allowance for individuals is £3,000 (GOV.UK, updated October 2026). Your cost is broadly the value already taxed when you received the shares, which is another reason to document that value.
Business Asset Disposal Relief, which taxes qualifying gains at a lower rate, needs, for shares, that you are an officer or employee of the company and hold at least 5% of shares and votes for two years, among other conditions (GOV.UK). A freelancer with a small stake will usually not qualify.
The Nigerian side
Make sure the shares are properly issued and recorded by the company under Nigerian company law, and that you receive a share certificate or equivalent. If you also invest cash, foreign investment into a Nigerian company has its own documentation, such as a certificate of capital importation, which matters when you later want to take money out; see the certificate of capital importation for UK investors. Nigerian tax on any later sale of Nigerian shares is a separate question to check at the time.
What to ask for before you agree
- A written agreement stating the number and class of shares, or the option terms.
- The capitalisation table and the latest investment price, if any.
- Vesting and leaver terms: what you keep if the project ends early.
- A board resolution or equivalent confirming the issue.
- A clear split between the cash fee and the equity, so each is taxed correctly.
- Advice from a UK accountant on the value to report.
For the cash part of the deal, our guides to contractor agreements with Nigerian clients and pricing for Nigerian clients apply as usual.
Where Pryme fits
For the cash part of a mixed deal, a Pryme Business Account can receive the startup's payments in naira or pounds and keep them in that currency until you choose to convert. A verifiable receipt through VerifyDoc.ai can record what was paid in cash, separate from the equity.
Questions people ask
Do I pay tax on startup shares before I sell them?
Possibly. Shares received as payment for work can be taxable when received, at market value. Ask an accountant about your case before you agree.
How do I value shares in a Nigerian startup?
Use the price paid by recent investors or the latest funding round if there is one. Without that, value the cash you are giving up instead.
Will I get Business Asset Disposal Relief when I sell?
Usually not as a freelancer. For shares, GOV.UK lists conditions including being an officer or employee and holding at least 5% for two years.
What is the Capital Gains Tax allowance?
GOV.UK gives £3,000 a year for individuals (page updated October 2026).
Sources
- HMRC Employment-Related Securities Manual ERSM20210 (updated 5 May 2026) · accessed Oct 2026
- GOV.UK: Tax when you sell shares (updated 30 Sep 2026) · accessed Oct 2026
- GOV.UK: Capital Gains Tax allowances (updated 2 Oct 2026) · accessed Oct 2026
- GOV.UK: Business Asset Disposal Relief · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.