The cost of taking cash in the UK is the number nobody writes down. Card fees arrive on a statement, itemised to the penny, so they feel expensive; cash costs arrive as bank deposit charges, unpaid cashing-up time and the occasional till that will not balance, so they feel like nothing. This guide puts honest numbers on both sides, without pretending cash is obsolete or that card providers are charities.
The myth that cash costs nothing
Ask most business owners what cash costs them and the answer is nothing, because no invoice ever arrives for it. Card fees, by contrast, are printed on a statement every month, which makes them feel like the expensive option by default.
That is an accounting illusion, not a fact. Cash has its own line items: bank deposit fees, staff time counting and reconciling it, trips to the branch, float errors and shrinkage. They are real, recurring and largely invisible because nobody itemises them.
This is not propaganda for card providers. It is an argument for measuring both properly, because you cannot compare a visible cost with an invisible one and call it a decision.
Cash handling costs: the hidden line items
Here is what taking cash actually involves once you list it out:
- Bank deposit fees: banks commonly charge roughly 0.5% to 1% to deposit business cash, and app-based banks route deposits through the Post Office with their own charges.
- Cashing-up time: counting the till, reconciling against the day's sales and preparing the deposit, every trading day.
- Banking runs: someone walking or driving takings to a branch or Post Office, in work time, with cash on their person.
- Float errors: wrong change given and till discrepancies that get written off in the till, a few pounds at a time.
- Theft and shrinkage risk: cash is the only payment method that can physically disappear, whether to a break-in or a light-fingered till.
- Weaker records: cash sales that skip the till leave gaps HMRC does not enjoy, and neither will you at year end.
The arithmetic: cash vs card on £1,000 of takings
Put £1,000 through a card machine and the fee is transparent: £16.90 at SumUp's 1.69% or £17.50 at Square's 1.75%, deducted before payout, with every transaction recorded automatically. You can check your own volumes on our fee calculator.
Now take the same £1,000 in cash. A 0.5% to 1% deposit fee is £5 to £10 off the top. Add cashing-up at, say, 20 minutes a day and a weekly banking run, priced at whatever your time or your staff's wages cost, and the gap narrows fast; if you value the time at all realistically, cash is not obviously the cheap option.
The honest conclusion is that both methods cost low single-digit percentages once everything is counted. Anyone telling you one is free is not counting.
The costs you cannot see on any statement
Beyond the countable costs sit the quiet ones. A till that will not balance costs you an evening of recounting; a cash discrepancy between staff members costs you trust, which is more expensive than the missing tenner.
Records matter too. Card takings reconcile themselves against your POS; cash relies on discipline, and gaps in cash records make your accountant's job slower and an HMRC enquiry more uncomfortable. Card fees, at least, are a clean, deductible business expense, as we cover in are card machine fees tax deductible.
None of this makes cash wicked. It makes cash a payment method with real operating costs, which deserves the same scrutiny you give a card provider's rate card.
When cash still earns its place
Cash is far from dead, and for some businesses dropping it would be self-harm. Plenty of customers, including many older people and those managing tight budgets, prefer or rely on cash, and turning them away has a cost no calculator captures.
Cash also wins on resilience. When the broadband drops or the card network wobbles, cash keeps trading; a float in the drawer is the cheapest backup system ever invented. And for very small tickets, some owners simply prefer the certainty of coins to any percentage fee.
Note that going card-only is legal in the UK, but that is a separate decision with its own trade-offs; our guide on whether a business can refuse cash walks through it properly.
The honest verdict: take both, measure both
For most small businesses the right answer is boringly balanced: accept both, and know what each one costs you. Customers choose how they pay; your job is to make sure neither option quietly bleeds you.
Three things worth doing this month: check your bank's cash deposit tariff, time one week of cashing up honestly, and compare the total against your card statement. If you take cards, a no-monthly-fee reader keeps the card side lean while you measure.
Whichever way your mix leans, revisit it yearly. Payment habits are shifting, bank tariffs change, and the right answer for your counter in 2026 may not be the right one in 2028.
FAQs
How much does it cost a business to take cash in the UK?
More than zero, which is the number most people assume. Banks commonly charge around 0.5% to 1% to deposit business cash, and on top of that sit cashing-up time, banking runs, float errors and shrinkage risk. Counted honestly, cash typically costs a low single-digit percentage of takings, in the same territory as card fees.
Is taking cash cheaper than taking card payments?
Often not, once you count everything. A card payment costs a visible 1.69% to 1.75% on flat-rate providers, while cash costs an invisible mix of deposit fees, staff time and errors that can add up to a similar figure. The fair comparison is your full cash-handling cost against your card statement, not card fees against zero.
Should my business stop accepting cash?
Not automatically. Card-only is legal in the UK and simplifies operations, but some customers rely on cash, and cash keeps you trading through internet outages. The sensible move for most small businesses is to keep both, measure what each costs, and let your actual customer mix drive the decision.
Why do banks charge to deposit business cash?
Handling cash costs banks money: counting, transporting, insuring and securing it all take labour and infrastructure. Business accounts typically pass that on at roughly 0.5% to 1% of the amount deposited, sometimes with a monthly free allowance. It is worth checking your tariff, because rates vary meaningfully between banks and account tiers.
