Aged 18, I arrived in Edinburgh bright-eyed and bushy-tailed, with boundless optimism and a wallet full of Northern Irish notes. That first weekend, I popped into a shop to buy a Fuse bar (bring it back, Cadbury’s, you know it makes sense!). The cashier looked over the First Trust Bank fiver and asked me if I had anything else. Confused, I grumbled something about legal tender and pointed out that it was Sterling, but he said he couldn’t accept it and asked for something else, so I had to go to the hole in the wall next door to get an acceptable note for that sweet, sweet chocolately hit.
I now realise that it’s kind of ironic an NI note not being accepted in Scotland when there is a stereotype of English people not accepting Scottish notes, with the cry of ” BUT IT’S LEGAL TENDER!” ringing out across the land. But is it? I thought it was worth finding out what legal tender actually was, and I was more than a bit surprised.
If both parties agree, you can pay for anything any way you like, be it with coins, notes, postage stamps, goats, or a pint.
However, if there is a debt to be settled and both parties differ on how it is to be paid, this is where legal tender comes in.
If I owe someone money, and I offer to pay it in legal tender, the other party must accept my payment. If they do not, then essentially they lose any right to my money. If I offer to pay someone in anything other than legal tender and don’t offer the possibility of legal tender, then the other party may sue me for non-payment. To illustrate, here are two scenarios:
- I have taken a taxi home from the pub and I want to pay the cabbie when I arrive
- I want to buy a Fuse bar in a WH Smith and pay at the till
Scenario 1 requires payment for a service already rendered and therefore a debt exists. If I offer to pay the cabbie in legal tender, they must accept, but they can refuse any non-legal tender method.
Scenario 2 means no debt exists, as I have not yet purchased the chocolate bar. Yelling “legal tender!” at the cashier or self-service machine has no effect, because there is no debt*. The cashier has effectively refused me service at all because my proposed payment isn’t to their liking (even if it’s legal tender), which is not quite the same as refusing payment. Paying £100 for a Freddo would probably be kind of annoying.
So what is legal tender in the UK?
Throughout the UK, all the standard coins are legal tender, although for smaller denominations there is a limit to how many you can spend at once (so don’t try and pay off your mortgage with 1p coins). Certain commemorative coins are legal tender too.
On the other hand, postage stamps are not legal tender anywhere in the UK, as the royal mint blog confirms. However, you are free to try and use them as they do have an obvious monetary value, but shouldn’t be disappointed if you are refused.
As for notes, in England and Wales, Bank of England notes are legal tender, meaning the cabbie won’t refuse your note in these places (as if they would). They are not legal tender in Scotland and NI. Unfortunately, Scottish notes are not legal tender in England, Wales, or Northern Ireland, and NI notes likewise are not legal tender in the rest of the UK.
But here is the surprise.
Scottish banknotes are not even legal tender in Scotland.
Yes. The same is true of Northern Irish banknotes in Northern Ireland. I don’t know why this is, but I imagine it has something to do with the fact notes in these countries are issued by private banks and not by the central Bank of England.
A Scottish cabbie can refuse my Scottish banknote and insist I pay them in coins, or drive me across the border and demand Bank of England notes.
Generally, though, people are mostly sensible, my incident with the First Trust fiver was a one-off, and I have never encountered any problems spending Scottish money in England (or in NI for that matter). But sadly, it isn’t actually legal tender.
I’ve got most of this information from the Bank of England website. Any errors, please let me know!
*There does remain the possibility that I could eat the chocolate bar in the shop before I pay for it, but by that point you’re just being a jerk