Legal tender has a very specific meaning when taken by the letter of the law. 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. So for example, if you are buying a car off someone and choose to part exchange your own car with them as part payment, this is ok. You can both agree a value and pay the remainder in legal tender cash, or by any other means you choose.
In order to comply with the very strict rules governing an actual legal tender transaction it is necessary to offer the exact amount. No change can be demanded. Part of the service shops offer is to return change to customers who do not have the correct legal tender amount!
The kilo coins
The Royal Mint recently requested a change to UK Legislation – specifically an amendment to the 40-year-old 1971 Coinage Act, a clause which limited the weight to which UK coins could be made. This was in order to mint UK kilo coins, the first kilo coins of the realm. The Gold and Silver kilo coins have face values of £1000 and £500 respectively, but you’re unlikely to ever see them in circulation!
The other coins that are legal tender in the United Kingdom are:
£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
Yes, this means that if you want to pay for something with more than 20 1p pieces, it is up to the seller to decide whether or not to accept. They don’t have to, though most will!