Have you ever wondered what constitutes legal tender in the UK and how this affects you as a retailer? You may recall the funny episode of The Office below where David Brent suggests that postage stamps are legal tender and that a bus driver would have to accept them as a fare. Well here are the facts...
According to the Coinage Act of 1971, 1ps and 2ps are only legal tender up to the value of 20p. But that doesn't mean you can't pay more than that in pennies if the person or business you're paying agrees. Legal tender has a very narrow meaning in the UK. Put simply, you can't be successfully sued for non-payment of a debt if you give the correct amount of money in legal tender. That's it. Everything else is up to the two parties involved in the transaction.
And fans of wacky ways to protest can take heart from one thing: £1 and £2 coins are legal tender up to any amount you like. Even if they're frozen in ice or put in a bathtub full of honey.
What coins can you pay with:
- 1p - for any amount not exceeding 20p
- 2p - for any amount not exceeding 20p
- 5p - for any amount not exceeding £5
- 10p - for any amount not exceeding £5
- 20p - for any amount not exceeding £10
- 50p - for any amount not exceeding £10
- £1 - for any amount
- £2 - for any amount
The rules for notes:
You can pay any amount in bank notes but:
- Bank of England notes are not legal tender in Scotland or Northern Ireland
- Scottish and Northern Irish banknotes are not legal tender in England and Wales
But while shops are under no obligation to take Scottish or Northern Irish notes in England and Wales (and vice versa), as the Bank of England explains in practice you may well have no problems at all using them.
The Royal Mail confirms that postage stamps are not legal tender. While you are free to accept stamps as payment for a service or goods, there is no legal obligation for you to accept them when offered and you have no legal recourse if payment in stamps is refused! Although, as a retailer you have the right to refuse a sale regardless of the tender offered (legal or otherwise).
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And here below is the clip I mentioned from the Office for you to enjoy. :-)
