Learn about the tax problems of holding too much cash in your company. Successful companies can accumulate significant cash balances if profits are left in the business and not paid out as salaries or dividends. That you may think is a risk-free strategy from a tax perspective and there is nothing wrong by holding cash which has been earned from profits in your company until you approach retirement.I have seen several clients over the years leave accumulated cash in their company with the intention of taking a large pay out when the company is wound up or sold on their retirement. They are looking to take advantage of Business Asset Disposal Relief where they will pay 10% capital gains tax on the first £1m and 20% on any excess.
