Is Scottish Money Legal?

Published by Admin on

The difference between “Legal Tender” and “Currency” explained

New Scottish £10 note
Legal Tender or Currency?

For those of you who are not in “the know” so to speak, let me try to explain this in simplified terms. There is a huge difference between “Legal Tender” and “Currency”, especially here in Scotland. Currency can be anything that is acceptable as payment in a trade between two people, for example when you trade in a car, the car that you trade in effectively becomes currency, whereby Legal Tender is exactly what the term implies and that is a form of tender or payment that is acceptable legally, for example in paying a debt.

In England, Legal Tender can be Coins or Bank of England Notes, whereby in Scotland and Northern Ireland only Coins are classed as Legal Tender, and even then there are some restrictions when using lower value coins, for example, 1p and 2p coins can only count as legal tender up to the amount of 20p.

Nowadays many places accept all UK banknotes (Sterling), coins and plastic cards as currency for making purchases, but it is of course entirely up to the retailer/supplier what type of currency they accept. For a better insight into this I would suggest you read this article on the Bank of England’s website – what-is-legal-tender

Retailers both here in Scotland & in the rest of the UK are of course within their rights to refuse to accept Scottish bank notes, however, I must point out that Scottish retailers are also within their rights to refuse English banknotes, now wouldn’t that be something of a turnaround….

One fact that many are not aware of is the true value of Scottish banknotes. Banks producing these Scottish notes must have the equivalent in assets deposited with the Bank of England to cover the value of the notes being printed. So a ten pound “Scottish” banknote will always be worth £10 sterling….

For those companies and retailers who openly refuse to accept Scottish Currency and given that the only legal tender across the UK as a whole is the £1 coin, then personally I would be tempted to pay for my goods with those, I would also encourage everyone else to do the same. The retailer would then be left with the mammoth task of having to count up and bank all them loose £1 coins.

I have heard of some places that have openly stated that they will only accept £1 coins up to £20, however, the law is quite explicit on legal tender and if you have already eaten a meal, or drawn the fuel from the pumps then you owe the restaurant or service station the money, so in effect it becomes a debt, they would then have to accept the payment in £1 coins as by law they cannot refuse legal tender in settling a debt.

I know that there are many people out there who are confused over the differences between “Currency” and “Legal Tender”, and I hope that this article has been helpful in explaining this to you. Please feel free to share this post in your social media groups.

Categories: Media