Businesses will not be required to accept cash for payments

Shops and service firms will not be required to accept cash payments, according to the new economic secretary to the Treasury Emma Reynolds.

Ms Reynolds was asked about instances of coffee shops, trains and leisure centres refusing cash in exchange for goods and services, potentially impacting millions of vulnerable people who still rely on this means of payment.

There are some governments around the world, including in Australia, that are planning legislation that would force essential service providers to accept cash, but Ms Reynolds confirmed that there were ‘no plans to regulate businesses to compel them to accept cash’—despite a government petition calling for it to be illegal for shops to refuse it.

However, she also confirmed that the UK was ‘not anywhere near’ becoming a cashless society.

In England and Wales coins and banknotes are classed as ‘legal tender’, which has led to confusion about the legality of refusing to accept cash in exchange for goods and services. However, this is a technical classification that does not mean businesses have to accept it as payment.

According to the Bank of England: “Legal tender has a narrow technical meaning which has no use in everyday life. It means that if you offer to fully pay off a debt to someone in legal tender, they can’t sue you for failing to repay.”

Card payment is the most popular method of buying goods and services in the UK, and the use of smartphones as a means of payment is increasing, particularly among younger people. Over 70% of 16-24 year olds regularly pay with mobile devices, while 60% of 25-34 year olds do so. However, just 8% of those over 65 use mobile payments, sparking concern that allowing businesses to refuse cash will impact vulnerable older people the hardest.

Despite the dominance of card and mobile phone payments, 2024 was the second year in a row that cash use in shops actually increased, according to the British Retail Consortium.

Should your business accept cash?

As we’ve covered in this article, there’s no legal requirement to accept cash in exchange for goods or services, and if you only sell online it’s not something you have to worry about anyway.

On the other hand, if you do business in-person, you need to consider what’s best for your customers.

Keeping track of multiple payment methods and managing cash as well as digital payments can get complicated, but here at Warr & Co we’ve got extensive experience of supporting small, medium and large businesses to manage their bookkeeping.

To find out more about how we can help, get in touch with us today.