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.
Scottish money legally has to be accepted.
Thought I do know of a few smaller shops that have refused as they are unable to tell if it’s real or fake.
The customer just had to go elsewhere.
To be fair, I think most people not used to Scotch money would have a hard time spotting a fake.
As for the rest.
I think tax works on a ‘benefits in kind’ sort of thing.
If you swapped half an hours work for a chocolate cake then the shop would still be liable for the VAT on the cake, but they had taken their profit as labour.
You’d probably have to declare the cash value of the cake on your tax return.
(in practice that won’t happen. But scale it up to your employer giving you a car instead of money and you have company car laws)
Thought I do know of a few smaller shops that have refused as they are unable to tell if it’s real or fake.
The customer just had to go elsewhere.
To be fair, I think most people not used to Scotch money would have a hard time spotting a fake.
As for the rest.
I think tax works on a ‘benefits in kind’ sort of thing.
If you swapped half an hours work for a chocolate cake then the shop would still be liable for the VAT on the cake, but they had taken their profit as labour.
You’d probably have to declare the cash value of the cake on your tax return.
(in practice that won’t happen. But scale it up to your employer giving you a car instead of money and you have company car laws)
daz3210 said:
My own stance is that it is optional, and that a Scottish Note has no legal status in England
Someone has suggested that if you use barter, taxation becomes difficult.
The Scottish note is not even legal tender in Scotland.Someone has suggested that if you use barter, taxation becomes difficult.
Does taxation apply if you barter for goods and services? I thought it was a tax on currency exchange for goods and services.
sleep envy said:
Does taxation apply if you barter for goods and services? I thought it was a tax on currency exchange for goods and services.
I’m pretty sure it applies if the goods or services have a recognised cash value.Otherwise Tesco would just barter with its staff for stock from the shelves and save themselves a load of tax.
daz3210 said:
GC8 said:
To start, you have to establish what 'legal tender' actually is - not what people assume.
Errrrr....... that was the basis of my original question.Royal Mint definition : http://www.royalmint.com/aboutus/policies-and-guid... (if they don't know, who does ? )
Scottish banknotes are not legal tender (even in Scotland), but they are legal banknotes : http://www.scotbanks.org.uk/legal_position.php
Scottish banknotes are not legal tender (even in Scotland), but they are legal banknotes : http://www.scotbanks.org.uk/legal_position.php
Snowboy said:
sleep envy said:
Does taxation apply if you barter for goods and services? I thought it was a tax on currency exchange for goods and services.
I’m pretty sure it applies if the goods or services have a recognised cash value.Otherwise Tesco would just barter with its staff for stock from the shelves and save themselves a load of tax.
Income tax ? That is what your P11D is for.
Corporation tax - revenue must be calculated using a fair market value of goods received etc
Etc
simoid said:
No trader legally has to enter a contract to sell anything to anyone in return for anything.
True ...and equally true is they are not obliged to give change either...so next time anyone pays for a pack of gum (or whatever) with a £20 (or whatever) don't be surprised if all you get in return is a Thank you and your pack of gum.oldsoak said:
True ...and equally true is they are not obliged to give change either...so next time anyone pays for a pack of gum (or whatever) with a £20 (or whatever) don't be surprised if all you get in return is a Thank you and your pack of gum.
That reminded me of an episode from my youth. The local shop had a sign saying "check your change as mistakes cannot be rectified later"They short changed me by about £2 and I went back, but they pointed at the sign and said "tough".
A couple of weeks later they gave me change for a £20 when I paid with £10. I went back in and said "you gave me the wrong change", they pointed to the sign and said "tough".
I might have taken some pleasure in saying thanks, I would keep my free money
Edited by blueg33 on Thursday 26th April 18:04
"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...
Bottom line is, they can be refused but sometimes its more hassle to do so than accept them...
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......
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.
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