Legal tender has a very narrow and technical meaning in the settlement of debts. It means that a debtor cannot successfully be sued for non-payment if he pays into court in legal tender. It does not mean that any ordinary transaction has to take place in legal tender or only within the amount denominated by the legislation. Both parties are free to agree to accept any form of payment whether legal tender or otherwise according to their wishes. In order to comply with the very strict rules governing an actual legal tender it is necessary, for example, actually to offer the exact amount due because no change can be demanded.
The amounts for legal tender are stated below.
In England and Wales the £5, £10, £20 and £50 notes are legal tender for payment of any amount. However, they are not legal tender in Scotland and Northern Ireland.
Coins are legal tender throughout the United Kingdom for the following amount:
£20 - for any amount
£5 (Crown) - for any amount
£2 - for any amount
£1 - for any amount
50p - for any amount not exceeding £10
25p (Crown) - for any amount not exceeding £10
20p - for any amount not exceeding £10
10p - for any amount not exceeding £5
5p - for any amount not exceeding £5
2p - for any amount not exceeding 20p
1p - for any amount not exceeding 20p
A note on £5 (crown):
We receive a lot of enquiries about the £5 (crown) coin's legal tender status. Each crown issue is authorised by Royal Proclamation in accordance with the requirements laid down by the Coinage Act 1971. This means that in common with other coins in general circulation, a crown has legal tender status.
Most people would not wish to exchange a crown piece, but in recognition of the fact that some people may wish to do so, some banks will allow crowns to be deposited into bank accounts. However, please note that whilst the coins are legal tender, banks are not obliged to accept the coins. Policies on accepting crowns do vary, therefore it is advisable to check with your bank in advance.
Alternatively, crowns can be exchanged for goods or services at Main Post Office branches throughout the UK. For further assistance please contact the Post Office Helpdesk on 08457 223344.