Legal Tender? Spending Scottish Currency in England

Scottish Bank Notes legal tender

The phrases ‘legal tender’ and ‘legal currency’ don’t play a large part in the everyday conversations of most people, unless, perhaps, those people happen to be involved in the world of banking, foreign exchanges and currency dealing.

The exception to this tends to occur whenever the issue of spending Scottish banknotes south of the border arises, and the issue of what is and isn’t legal comes to the fore.

In order to discuss this matter it’s probably wise to acknowledge that there are two levels of reality to deal with. The first is the technical, legal side of things, which states, pretty much unequivocally, that Scottish bank notes can be used to pay for goods and services throughout the UK.  The second is the practical reality, which sometimes sees consumers having problems getting Scottish bank notes accepted.

Is it Legal?

When dealing with the issue of ‘legal tender’ it should be noted that, according to the Committee of Scottish Bankers, Scottish bank notes, while being legal currency (which means that they’ve been approved by the UK Parliament), are not actually classified as ‘legal tender’ in Scotland itself.

The fact that the Scottish economy manages to function perfectly well without the ‘legal tender’ status being conferred is an indication of just how much of a technicality it actually is. According to notes issued by the Bank of England:

‘The term legal tender does not in itself govern the acceptability of banknotes in transactions. Whether or not notes have legal tender status, their acceptability as a means of payment is essentially a matter for agreement between the parties involved. Legal tender has a very narrow technical meaning in relation to the settlement of debt.’  

The issue of ‘legal tender’, then, is something of a red herring. What matters more is whether the notes will be accepted south of the border, and what recourse an individual has if they are not.

As stated, the notes should be accepted everywhere, but the practical reality is that this is sometimes not the case. In late 2016 several media outlets highlighted the case of several branches of McDonalds in England which had been refusing to accept Scottish bank notes.

Thorny issue

The issue came to attention after a 16-year old girl was unable to pay for her happy meal using notes sent to her by Scottish relatives. It emerged that the McDonalds in question, along with nine others in the Lincolnshire area, was run by a franchisee named Martin Cuthbert, and that Mr Cuthbert had advised his staff not to accept Scottish bank notes which, in legal terms, they were fully entitled not to do.

Fending off allegations of being anti-Scottish, Mr Cuthbert insisted that the move was actually a measure aimed at protecting his staff from taking counterfeit notes, something which the unfamiliar nature of the Scottish notes might make more likely.

The same situation was also found to be occurring in a branch of the retailer TK Maxx in Milton Keynes, and doubtless in many other cases which didn’t rise to such national media prominence.

The ultimate message is that it is at the discretion of individual retailers and businesses whether to accept Scottish bank notes or not, and that a refusal to do so is likely to be based less on uncertainty over the status of the notes and more on a concern about taking counterfeit currency.

The counter argument to this, of course, is that businesses should take the time to teach their staff more about currency which it is legal for customers to use.

This is a thorny issue for Scots as you would imagine and because both Scottish and English notes form part of the same currency, they cannot be traded in the markets however there is a compromise solution available.

The good news for anyone caught in the position of having their legal currency declined is that the vast majority of high street clearing banks will be happy to exchange Scottish notes for English notes free of charge. 

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