What constitutes 'Legal Tender'?
Discussion
Very interesting.
Does 'legal tender' apply where you've already taken possession (so to speak) of goods or services and then intend to pay for them?
e.g. at a petrol station—you've put fuel in your vehicle, then go to pay for it. Are you in debt to the petrol station, in which case they're obliged to take your 'legal tender'? Or could they refuse it and then extract the precise amount of fuel from your vehicle?
Does 'legal tender' apply where you've already taken possession (so to speak) of goods or services and then intend to pay for them?
e.g. at a petrol station—you've put fuel in your vehicle, then go to pay for it. Are you in debt to the petrol station, in which case they're obliged to take your 'legal tender'? Or could they refuse it and then extract the precise amount of fuel from your vehicle?
IAmAHorse said:
Very interesting.
Does 'legal tender' apply where you've already taken possession (so to speak) of goods or services and then intend to pay for them?
e.g. at a petrol station—you've put fuel in your vehicle, then go to pay for it. Are you in debt to the petrol station, in which case they're obliged to take your 'legal tender'? Or could they refuse it and then extract the precise amount of fuel from your vehicle?
I imagine common sense would kick in and they would accept the cash. A few years ago an English taxi driver wasn't happy with my money - but when he realised it was Scottish notes or nothing at all, he decided that there was nothing wrong with them after all.Does 'legal tender' apply where you've already taken possession (so to speak) of goods or services and then intend to pay for them?
e.g. at a petrol station—you've put fuel in your vehicle, then go to pay for it. Are you in debt to the petrol station, in which case they're obliged to take your 'legal tender'? Or could they refuse it and then extract the precise amount of fuel from your vehicle?
tex200 said:
I imagine common sense would kick in and they would accept the cash. A few years ago an English taxi driver wasn't happy with my money - but when he realised it was Scottish notes or nothing at all, he decided that there was nothing wrong with them after all.
Glad to hear it.2 pence coins for a sum not exceeding 20 pence
http://www.royalmint.com/aboutus/policies-and-guid...
ignore this link if you saw marshalla's link
http://www.royalmint.com/aboutus/policies-and-guid...
ignore this link if you saw marshalla's link
Edited by db on Thursday 26th April 22:01
IAmAHorse said:
Or could they refuse it and then extract the precise amount of fuel from your vehicle?
Technically no, because they cannot separate their fuel from your original fuel. If they could prove they extracted only their fuel they could. Being the same quantity is not the same as retrieving their fuel.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)
Spending half my life North of the border, I often find myself in England with a fist full of Scots bank notes. I get the odd problem South of Newcastle, but rarely in London.
I usually pass the cash off in my English local if I have a lot. They are happy to swap it for me. Failing that my Jock mate Kenny will swap it as he spends as much time over the border as I do.
I had a Northern Irish mate who bought a largish round of drinks in a English pub and offered a NI cash. Refused. He politely told them to keep the now poured beers wines and spirits. They took his money.
OT. When did Scotand abandon the £1 note?
I usually pass the cash off in my English local if I have a lot. They are happy to swap it for me. Failing that my Jock mate Kenny will swap it as he spends as much time over the border as I do.
I had a Northern Irish mate who bought a largish round of drinks in a English pub and offered a NI cash. Refused. He politely told them to keep the now poured beers wines and spirits. They took his money.
OT. When did Scotand abandon the £1 note?
daz3210 said:
I knew about the more than so much is not legal tender with coins. I did think it was far less than a pound too.
I was put right on the amount by db's post. It's been a long time since I was involved in this sort of thing and I CBA to look it up I just brought that in as a further example.daz3210 said:
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)
No. As you will see from the link to the royal mint website, and my original post, the legal definition of legal tender is not what most of the population think it is. To reiterate (and streaky amplified this as well) it applies to currency that you HAVE in law to accept in the payment of debts. 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. If they are quite happy to take it, that's another matter entirely, but the issue of "legal tender" doesn't come into it.
rs1952 said:
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.
Depends on the debt and any contract. So, if I bet you a tenner and lose, is that a debt that can be satisfied by legal tender ?
You may refer to the enforceability of gambling contracts in any answer given
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 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.
Yes. We have the same situation with Insurance. Contractually we state we won't accept cash or cheques, but that is pre-tender effectively.
However, if someone fails to pay and sends us a cheque, we would bank it as we would be in bother from the FSA if we didn't.
But that doesn't apply to HMRC for VAT and Corp Tax now. It must be electronic. Although you can still pay via cheque at your bank with a payslip.
Maybe that is challengeable, but I am certainly not going up against the VaT man, they threatened to remove our registration because we didn't answer them when they asked if we wanted a DVD !! And they pitched up at our house snooping around for computer parts pre registration. Scary.
However, if someone fails to pay and sends us a cheque, we would bank it as we would be in bother from the FSA if we didn't.
But that doesn't apply to HMRC for VAT and Corp Tax now. It must be electronic. Although you can still pay via cheque at your bank with a payslip.
Maybe that is challengeable, but I am certainly not going up against the VaT man, they threatened to remove our registration because we didn't answer them when they asked if we wanted a DVD !! And they pitched up at our house snooping around for computer parts pre registration. Scary.
Edited by Noger on Friday 27th April 09:11
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.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.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.Surely this comes down to determing "value".
If you sell an employee a car at half retail price would they be receiving BIK or just a discount that Joe Public could negotiate (in theory).
I have worked at a couple of places where staff could buy product at cost plus 5% so would not "cost" be relevant to "value"?
I know there are major retailers who mark last season's stock down (and keep doing so until it sells) which often finishes up at below cost, so is effectively "written of" so in this case "value" is not related directed to "cost".
I'm sure that HMRC will have thought up regulations to make any benifit taxable anyway!
If you sell an employee a car at half retail price would they be receiving BIK or just a discount that Joe Public could negotiate (in theory).
I have worked at a couple of places where staff could buy product at cost plus 5% so would not "cost" be relevant to "value"?
I know there are major retailers who mark last season's stock down (and keep doing so until it sells) which often finishes up at below cost, so is effectively "written of" so in this case "value" is not related directed to "cost".
I'm sure that HMRC will have thought up regulations to make any benifit taxable anyway!
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