storing company money as cash

[ratewhore]

Here's one for ya, the thread with the safe bed got me thinking.

Say you have £100K in the business account. You want to take 50% of that as cash and stick it in a safe. If it withdrawn as cash, how is it accounted for in the books?

[zara_backdog]

Here's one for ya, the thread with the safe bed got me thinking.

Say you have £100K in the business account. You want to take 50% of that as cash and stick it in a safe. If it withdrawn as cash, how is it accounted for in the books?

Petty Cash?

[Mustang]

With the caveat that I am not an accountant.....

Are there limits on the amount you can claim as petty cash? £50k might be a tad too much....?!

My proposal would be to set up a seperate 'cash account' on the books of MyCo. Credits to the account would be shown and would equal the debits from the bank account. Debits (if any) from the cash account would be recorded and would need to be supported by receipts/invoices as usual.

Providing that at any time (e.g. an HMRC inspection) you could show that any cash you have in the safe is equal to the balance of the cash account then you should be OK.......!!

Comments?

[Pondlife]

Providing that at any time (e.g. an HMRC inspection) you could show that any cash you have in the safe is equal to the balance of the cash account then you should be OK.......!!

Comments?

I would assume that you would have to provide evidence that there was no BIK derived from the cash not being in Your Cos account. That is, prove it's not in an offset mortgage account or in bonds, stocks in your name etc.

IANAA though.

[ratewhore]

Yeah, an accountanty type person said any cash taken out would have to be declared as a divvy but I thought they may have been talking out of their hoop.

I may look into it further, cheers guys!!

[pmeswani]

Yeah, an accountanty type person said any cash taken out would have to be declared as a divvy but I thought they may have been talking out of their hoop.

I may look into it further, cheers guys!!

I assume a Director's loan is out of the question?

[AlanR]

Here's one for ya, the thread with the safe bed got me thinking.

Say you have £100K in the business account. You want to take 50% of that as cash and stick it in a safe. If it withdrawn as cash, how is it accounted for in the books?

I realise that the OP is maybe a hypothetical question but why would you want to do that?

[pmeswani]

I realise that the OP is maybe a hypothetical question but why would you want to do that?

Bearing in mind that banks are not able to guarantee any amount over £50k, one would be screw*d if the bank goes under.

[moorfield]

I guess you could list it as cash in hand on yourco's balance sheet, otherwise HMRC will probably view at as a director's loan.

Obviously if you lose / spend it you are f****d. I think that goes without saying.

[SueEllen]

Bearing in mind that banks are not able to guarantee any amount over £50k, one would be screw*d if the bank goes under.

Then the common sense option is to open up another account for the company with a different bank and deposit it there.