A shop does not have to take your banknote — and that is the law

A cashier refuses a £50 note for a pack of chewing gum and the customer reaches for the famous line: but it's legal tender. The Bank of England answers that plainly: no, that does not oblige the shop to take it.

What legal tender actually means

The Bank explains that the term is about settling debts, not about paying in shops. If a debtor offers a creditor exactly the sum owed in a form that counts as legal tender, and the contract does not specify another method, they have a defence in law against being sued for non-payment. That rarely comes up at a till.

The Bank's own wording is blunt: a shop owner can choose what to accept, and turning down a £50 note is perfectly legal. Whether banknotes are accepted as payment is a matter of agreement between the parties, not of legal tender status.

The myth works in reverse too: debit cards, cheques and contactless payments are not legal tender anywhere.

Scottish and Northern Irish notes

This surprises even long-term residents. Bank of England notes are not legal tender in Scotland. Scottish notes are not legal tender in England or in Scotland either: there, only Royal Mint coins hold the status.

The notes themselves are sound. The six issuing banks in Scotland and Northern Ireland must by law set aside assets worth at least the value of the notes they have in circulation, so holders get protection comparable to holders of Bank of England notes, and there is no end date for acceptance.

But no shop has to take them. Danske Bank, one of the Northern Ireland issuers, puts it without illusions: its notes are valid sterling across the UK, subject to the retailer being willing to accept them, and they are refused more often in England, Scotland and Wales where staff know them less well.

ADV · A001ONLYWAY JEWELRY — gold, silver and platinumRings, chains, bracelets, earrings and pendants. Delivery across the UK.Advertise here

Coins do have a ceiling

Small change is legal tender only up to a limit. 1p and 2p coins count as legal tender for amounts up to 20p, 5p and 10p coins up to £5. £1 and £2 coins count for any amount.

A torn note

Damaged notes are exchanged by the Bank of England. The general rule is that the face value is reimbursed if at least half of the note survives. In a small number of cases less is accepted, but only where there is clear auditable evidence of destruction — typically a business case, such as a fire in an ATM.

You cannot hand damaged notes in at the counter. They go by post only, with the application form and all the remaining fragments. Most claims are assessed within a month and paid electronically. For claims of £700 or more you must send photo ID, proof of address and a bank statement. Scottish, Northern Irish and foreign notes are not handled by the Bank of England and are returned to be sent to their own issuer.

Old paper pounds: no deadline

Paper £20 and £50 notes stopped being legal tender on 30 September 2022, the paper £10 on 1 March 2018 and the paper £5 on 5 May 2017. They did not stop being money. The Bank states three times on one page that there is no deadline to exchange old banknotes, and that its notes always keep their face value. There is no limit on the amount, and no fee.

The simplest route is to pay them into your own bank account. The Bank names Barclays, Halifax, Lloyds, Nationwide, NatWest and Santander among those that accept them, while warning that banks are not obliged to.

The Post Office takes most old notes as a deposit, and 50 branches across the UK will swap them even without an account. Its own terms are stricter than many assume: the exchange is free but capped at £300 in any two-year period, valid photo ID is required, the minimum age is 12 and you cannot exchange on someone else's behalf.

If every counter says no, the Bank of England itself remains — by post or in person at Threadneedle Street. A notice on its site currently warns of delays of up to 90 working days on postal exchanges.

What to do

Do not argue legal tender with a cashier: the law is on their side. Carry smaller denominations if you pay in cash. Pay Scottish notes into an account rather than trying to spend them in England. And do not bin a torn note: half of it is enough to get the whole value back.