Investment & Investing

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frank9755

The other issue is HMRC doesn't like companies keeping piles of cash for a long time. It expects that excess cash will be distributed as dividends and taxed accordingly. Hoarding cash risks being seen as trying to avoid tax on dividends to get Entrepreneur's relief / BARD later on.

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inchpincher in reply to @frank9755

Thanks all, we'll approach dividends when work is a bit quieter but we'd be mad to not lock some cash up at 5%.
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jaitch in reply to @frank9755

Unless you need to keep a certain amount as capital requirements. Obviously banking is different to other industries and you are correct. Even with higher rates currently larger cash reserves should be made to work in investments ideally
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ChasnotRobert in reply to @frank9755

Interesting. Are HMRC in a position to advise on working capital requirements?

I'd have thought not, maybe it depends on the scale of the cash pile.

A while back my father fell out with his business bank and as result moved to working capital rather than borrowing to run his firm (by minimising dividends and other cash outflows). He's not mentioned HMRC not liking it.

Edit: also has anyone told Berkshire Hathaway about this? :)