Good points.
I don’t know about the UK, but in America, banks report to the government if someone deposits $10,000 or more in cash into the bank. I wouldn’t be surprised if people in the UK making large deposits, end up on someone’s radar due to this.
Do not be surprised if your cash transactions, of whatever size, are available to government entities whenever they develop a curiosity about your actions, without warrant.
The banks will also report you if you make closely spaced cash deposits, each under the $10k cash deposit reporting limit, in what seems to be an obvious effort to avoid the reporting requirement.
Say, six $8k cash deposits and a $2k cash deposit on successive days, instead of a single $50k cash deposit.
The practice is called “structured deposits” and that will also rate a visit from the FBI, DEA, or their state/county/city equivalents.
A lot of small, service type businesses run afoul of this rule if cash makes up a lot of their revenue flow. Due to the money grabbing incentives created by Civil Asset Forfeiture laws, law enforcement is quick to allege illicit activity as the source of the cash and very reluctant to return it when it isn’t.