Royal Mint coins are the only legal tender of the UK

[simon13]

Following an off topic discussion in the conspiracies thread i've been learning more about UK money. Bank of England notes are only legal tender in England. Scottish and Northern Irish notes are not legal tender anywhere.

The only legal tender throughout the UK is Royal Mint coinage which is directly owned by the UK treasury.

With regards to metals. Sovs, gold £2 and £5 and Brits are more legal tender than paper notes.

The issuer of debt can take whatever money as long as both parties agree or legally he can insist on payment in legal tender ( BoE notes in england or coinage in the UK).

We were talking about taking gold or silver legal tender as payment as the value of metal is more than the face value.

This could be done, but there is a problem. Say I offered a good room and dinner for 2 at for the price of a gold sovereign, I would issue an invoice for £1. The customer could then settle his debt with a normal £1 coin and I wouldn't legally have a leg to stand as ultimately, if insisted upon, debts must be settled in legal tender.

Such a system would require trust that the customer would settle the £1 in gold rather than pocket change. The upside would be that everything is legal and on the books and the VAT is only on the £1 not on the spot price of a sovereign.

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[HighlandTiger]

You do deals for rooms with payment in whisky do you not?

 

Just do the same "specials" for selected guests who wish to pay in pm's

[HelpingHands]

I wondered if it was like a barter transaction. If someone says "I'll give you this canoe if I can stay one night" how do you account for it and would this apply to P.M.s?

 

 

I bet you're fed up of people trying to pay in canoes.

 

 

http://www.hmrc.gov.uk/vat/managing/special-situations/samples.htm#4

 

VAT and barter transactions

If you supply services or goods (new or second-hand) and receive other goods or services in payment, there are two separate supplies:
•the supply from you to your customer
•the supply from your customer to you

You must account for VAT, and so must your customer if they're VAT-registered. The VAT treatment is the same as for part-exchanges. You must both account for VAT on the amounts you would each have paid for the goods or services if there had been no barter and they had been paid for with money.

Top

Set-offs

If you and another person owe money to each other you might agree to set one amount off against the other. If the amount you owe each other is the same, neither of you will have to pay anything. If the other person owes more than you, they'll only pay you the balance after setting off what you owe them. This type of transaction is known as a set-off or 'contra'.

You might have an account with another business that you settle up from time to time, with each of you just paying the balance after setting off what the other owes. This reduces the number of payments you each have to make. Sometimes you might agree to accept goods instead of payment. For example, a garage proprietor might agree to repair a newsagent's van in return for their cancelling last month's newspaper bill.

If both businesses involved in the transaction are registered for VAT, you must both account for VAT on each separate supply you make to each other. You have to do this even if no money changes hands, or if you pay only a net amount after setting off one outstanding balance against the other.

HMRC will expect to see sales and purchase orders and shipping information for each supply as well as the entries in your accounting records.

Like all other transactions, you'll need to check that you've got the tax point right. The date of the tax point depends on whether you issue an invoice or you just record the set-off in your accounting records.
•If you issue an invoice, the tax point is the date of the invoice and you must account for the VAT at that time.
•If you set off supplies or mutual debts by making an entry in your books to show that the amount is no longer outstanding, the tax point is when you make the entry. You must account for VAT at that time on the full amount of the supply.

Example

Company A and Company B supply each other with goods. The cost of the goods in both cases is £500 plus VAT. If they both issue invoices when they supply the goods, the invoices create the tax point and they must account for VAT in the normal way. If they later set off the amounts owed, no money will change hands but the set-off won't affect the VAT position, as the VAT should have already been accounted for.

If they set off the amounts they owe each other in their accounting records before they issue an invoice, the entry in the records creates the tax point. Neither pays anything to the other but they must both declare their output tax on their supply and reclaim the input tax on their purchase at the date when they made the entry.

Find out more about tax points and when payments are due

 

[simon13]

Surely the tax would be on the face value of £1 for a sov. Did quite a bit of reading, including the 1971 coinage act and amendments and I think its cool for hotel rooms. You couldn't legally buy a fixed price good or settle a drinks bill because of other laws (in Scotland) The reason it doesn't openly happen is because if you are invoiced £1 for £190 worth of services (if the supplier expects a sov) you could pay him a normal £1 coin and he wouldn't have a legal leg to stand on. As long as there is trust, it should work fine and legal (s long as RM legal tender is used and tax is paid on the face value.

Naturally you would be asking for hassle if you openly advertised such an offer, i'm sure the loophole would eventually get closed off.

As long as business and customer can stick to their gentleman's agreement, it would work and be legal. Thoughts?

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[HelpingHands]

Well you might not want to advertise it as people might think you've got piles of gold to rob. It'd be difficult to convince some nutter that you only do this sort of transaction once in a gold moon.

[simon13]

Were I to do it, it would have rules such as active forum members for at least 3 months and no crossbows

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[simon13]

Crimes not really an issue up my way. I'd be more concerned about the days takings in cash or my whisky cellar.

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[silversword]

Legal tender laws were brought about to enable the Bank of England to get away with issuing paper money and then convincing people to use it: By making BoE notes legal tender, people could be assured that they could settle their debts - including, most importantly, taxes - with paper notes and not be required to make payment in specie. It was all about gaining confidence from an un-trusting public. 

 

The law is quite simple. If something is legal tender, it cannot refused as settlement of a debt. This is why, when you look into it, 1p coins are legal tender, but only up to a maximum of 20p or some such amount. This prevents people taking the piss and trying to settle million-pound debts in small denomination coins for the sheer nuisance of it.

[simon13]

But you can use £1 coins to settle debts up to any amount, these laws only apply to 50pences and below. This was part of the 1971 coinage act to stop people being obtuse and paying council tax in pennies

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[HelpingHands]

If I remember correctly silver coins are legal tender to the same amount as those coin banking bags.

Brown is only 20p.

In fact, I'll find and paste.

Coins:

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

[simon13]

But you could use silver £2 brits

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[simon13]

I'm away on a business trip to Holland for a week. We sponsor Maltstock, an independent not for profit whisky festival for real geeks.

I'll mull it over and maybe put out a deal at my hotel for forum members, if anyones interested. There would be a good discounted rate for paying in gold or silver british legal tender because of the VAT savings but only for Dinner Bed and Breakfast. Drinks and extras would have to be settled in fiat.

I wonder if british elites settle some deals in Gold legal tender to reduce VAT and other taxes?

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[simon13]

http://androidandme.com/thread/samsung-pays-apple-1-billion-sending-30-trucks-full-of-5-cents-coins/

Remember this?

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[HelpingHands]

I wonder if british elites settle some deals in Gold legal tender to reduce VAT and other taxes?

There are those 'giant' and 'titan' banknotes worth 1 mil and 100 mil.

[simon13]

@Helping Hands Breaking into my dungeon is easier said than done. this is just one of 4 doors and 24hr staff and some custom security

And thats just to keep the gimp from escaping

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[HighlandTiger]

http://androidandme.com/thread/samsung-pays-apple-1-billion-sending-30-trucks-full-of-5-cents-coins/

Remember this?

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Not wishing to burst your bubble, but that was an internet hoax. 

 

http://www.snopes.com/politics/satire/samsung.asp