What constitutes 'Legal Tender'?
Discussion
Basically, can anyone help settle an argument that has/is occurring in our office.
Start was, can anyone be forced to accept a Scottish Note south of the Border.
My own stance is that it is optional, and that a Scottish Note has no legal status in England, that does not mean that it cannot be accepted in payment by a person willing to do so (a Google search suggested to me this was the case also), any less than if I was willing to accept payment of a dozen eggs in exchange for a pint of milk (i.e. simple barter system).
But the argument is now getting messy. Someone has suggested that if you use barter, taxation becomes difficult, therefore it is not legal (the tax bit I can agree with, the legality/illegality of barter I am on the fence with).
There has also been the suggestion regarding cheques. More an more I see signs 'Cheques not accepted'. One of the office wallah's has asked well what happens if someone sends you a cheque then, does the fact they have attempted to pay give them a defence if a summons is subsequently issued?
I know some of this may be moving away from the original question in the header, but what actually constitutes 'legal tender', and can you force someone to accept payment by a method other than this.
Start was, can anyone be forced to accept a Scottish Note south of the Border.
My own stance is that it is optional, and that a Scottish Note has no legal status in England, that does not mean that it cannot be accepted in payment by a person willing to do so (a Google search suggested to me this was the case also), any less than if I was willing to accept payment of a dozen eggs in exchange for a pint of milk (i.e. simple barter system).
But the argument is now getting messy. Someone has suggested that if you use barter, taxation becomes difficult, therefore it is not legal (the tax bit I can agree with, the legality/illegality of barter I am on the fence with).
There has also been the suggestion regarding cheques. More an more I see signs 'Cheques not accepted'. One of the office wallah's has asked well what happens if someone sends you a cheque then, does the fact they have attempted to pay give them a defence if a summons is subsequently issued?
I know some of this may be moving away from the original question in the header, but what actually constitutes 'legal tender', and can you force someone to accept payment by a method other than this.
So if the legal tender bit has no meaning in the case of a shop, does it in the case of say a tax bill?
If I sent a cheque to pay tax, and the Revenue refused it, what would the status be if it came to court? I would have sent a payment in a 'legal' format (in that a cheque in itself is not illegal), but I did hear that cheques were being phased by HMRC.
But I have also heard of people very recently receiving cheques from them, which suggest when the boot is on the other foot......
If I sent a cheque to pay tax, and the Revenue refused it, what would the status be if it came to court? I would have sent a payment in a 'legal' format (in that a cheque in itself is not illegal), but I did hear that cheques were being phased by HMRC.
But I have also heard of people very recently receiving cheques from them, which suggest when the boot is on the other foot......
rs1952 said:
Robin1der said:
"Legal tender" has no actual meaning in modern law. Scottish banknotes bear the amount they are to be accepted for provided the person being asked to accept it does so. Even large companies south of the border are under no obligation to do so and can refuse them if they wish but seldom do as if they are presented to a bank they would be accepted whilst paying in.
Bottom line is, they can be refused but sometimes its more hassle to do so than accept them...
This is more or less correct. I am reminded of a conversation I had over and over again over 30 years ago with a cashier who couldn't get her head around the concept of "legal tender." It runs like this:Bottom line is, they can be refused but sometimes its more hassle to do so than accept them...
If you owe me a tenner, and you offer me a £10 note issued by the Bank of England with the Queen's head on it, that is legal tender. I am not at liberty to refuse your tenner in payment of the debt (in case anybody feels like getting pedantic, of course I can ask you for two fives or whatever, but at the end of the day I am obliged to take the money).
If, however, you offer me a tenner issued by the Bank of Scotland, I am not obliged to take it. I can take it if I want to, bit I am not obliged to take it because it is not "legal tender."
That cashier had got it into her thick skull, after reading somewhere that Scottish banknotes weren't "legal tender", that "a Scottish note isn't legal tender therefore it is "funny money" and she couldn't take it"
That's not what the concept of legal tender means, although I suspect half the country thinks it is. "Legal tender" means you are obliged to take that particular note, "not legal tender" means you can take it if you want to, but you are not obliged to.
Off on a tangent, there were also restrictions on small coins. I've no idea what the figures are now because its been 25 years since I worked anywhere near a cashier's office, but 2p coins were only legal tender up to, I think, £1. So, in other words, if you were trying to pay a 98 pence debt in 2 pence pieces the other party couldn't refuse them, but if you tried to pay a debt of £1.02 in 2 pence pieces it was up to them whether they accepted it or not.
But in todays society not everyone wants to carry cash. So is there any other forms of payment that people have to accept if confronted with it (e.g. cheques, bankers drafts etc)
Noger said:
rs1952 said:
Nobody is obliged in law to accept a bankers draft, a cheque, a credit card payment or, come to that, a bunch of carrots in lieu of money.
There are plenty of situations in which a reasonable offer of payment must be accepted. For example a debt to a financial institution can't enforce legal tender, ok so that is regulatory rather than statutory, but the effect is the same. Except for the carrots 
I'm thinking of the HMRC recently saying they will no longer accept cheques.
RizzoTheRat said:
sleep envy said:
Snowboy said:
Otherwise Tesco would just barter with its staff for stock from the shelves and save themselves a load of tax.
I wouldn't put it past them.Fish said:
daz3210 said:
I suppose strictly speaking the discount is a 'benefit in kind', but on the other hand, there is no legal minimum price at the moment on most things (alcohol may come into being soon), so if I said to an employee the price is £x, and the employee then said I want to pay £y, why should that be different to if a MoP did the same. That is the fundamental act of bargaining. The fact I have differential pricing is my own business surely.
Afraid not. It would be considered a benefit in kid if it were sold at undervalue. Say I own a car business and I sell myself a car 1/2 price because I need to get rid, I'd be taxed on BIK of the difference.Gassing Station | Speed, Plod & the Law | Top of Page | What's New | My Stuff