Unknown law that could see your cash payments refused


Many of us use card or contactless payments on the go.

It can be easier than scrambling for change, and the coronavirus pandemic has also impacted our spending habits.

But cash is still an integral part of our transactional lives, and there are times when only that will do.

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There are, however, certain restrictions that apply to cash payments – and many of us may not be aware of them.

All transactions must take place in “legal tender”.

According to Royal Mint, legal tender has a very narrow and technical meaning in debt settlement.

This has an impact on payments using coins.

The Royal Mint says that 1p and 2p coins are only legal tender if you pay for something that costs 20p or less: once you have amassed 21 coins of 1p or more, your coins are in breach of the Coinage Act 1971 if they are used in a single transaction.

Even if you buy penny candy.

You can spend up to £5 on 5p or 10p coins, or up to £10 each on 50p and 20p coins.

There is no limit on £1 or £2 coins.

Both parties are however free to agree to accept any form of payment, legal tender or otherwise, if they so wish.

So if a trader, for example, is willing to take £20 in 2p coins, there’s nothing stopping you from paying that way.

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