Yes, in the UK, shops can legally refuse cash payments and insist on card-only transactions. While banknotes and coins are considered "legal tender," this term specifically refers to settling a court-ordered debt and does not compel retailers to accept cash for everyday purchases. Businesses have the right to set their own policies.
While cash is considered a legal tender, businesses have no legal obligation to accept it and have the right to set their own payment policies. This means that a brick-and-mortar store can refuse cash, just as they can reject other forms of payment, such as certain credit card payments or cheques.
False. The British government has not announced rules that ban cash payments above 10,000 pounds or that require identity checks for payments above 6,300 pounds from 2027. This article was produced by the Reuters Fact Check team. Read more about our fact-checking work.
Tesco caused uproar among shoppers this week when it confirmed it would ban cash payments at some of its cafes. The card-only policy will be rolled out to 40 in-store eateries. The supermarket has reportedly taken the decision after a new electronic ordering system helped to significantly cut down queues.
The short answer is no—cash-in-hand payments are not illegal. However, things can get complicated if the right legal procedures aren't followed. While paying employees in cash may seem easy, employers and employees must ensure compliance with tax and employment laws.
Is it illegal for a business to refuse cash as payment?
Is it against the law to carry cash in the UK?
Cash Detention Orders & Cash Seized By Police
Since 2002, UK law has granted police officers and customs officials the authority to seize cash exceeding £1,000 if they hold a reasonable suspicion that the money is intended for use in unlawful activities or if they suspect that its origin lies in illegal conduct.
Report a business to HM Revenue & Customs ( HMRC ) if theyÂ're paying workers without paying Income Tax or National Insurance contributions. Report Income Tax fraud online using the Tax Evasion Hotline form or by telephone or post. For your own safety you shouldnÂ't: try to find out more about the fraud.
Tesco's "new cash rule" involves banning cash payments at 40 of its in-store cafes, requiring customers to use digital kiosks and pay by card or contactless instead, a move aimed at speeding up service, though it faced criticism for impacting elderly or less tech-savvy shoppers. While some stores also have card-only self-checkout lanes, the main change affects the cafe experience, compelling digital ordering and payment for food and drinks at these specific locations.
It is not illegal to keep cash at home in the UK, but it should be stored securely to mitigate risks. The amount of cash to have on hand varies, but a small amount for emergencies is recommended while keeping most in a secure bank account.
Even if the bill is split, paying Rs 2 lakh or above in cash is not allowed. Such payments must be made through bank transfer, UPI, cheque, or a card, says Soni. Soni further says for loans between people, the rule is stricter. If you take or give a loan of Rs 20,000 or more, it cannot be in cash.
Cash deposits over $5,000 don't automatically trigger a government report. But they do put the transaction into a higher scrutiny bucket inside your bank. Tellers are trained to watch for patterns that look unusual for you. A single large deposit tied to a clear explanation rarely raises eyebrows.
The UK is rapidly moving towards being a low-cash, but not fully cashless, society, with digital payments dominating, yet cash remains crucial for millions, especially vulnerable groups, leading to government efforts to protect access via legislation, banking hubs, and ATMs, even as some businesses go card-only and digital ID plans emerge. While cash use has plummeted (less than 10% of payments in 2024/25), the Bank of England and officials stress that a completely cashless system isn't feasible or desirable yet, focusing on maintaining choice and access for everyone, including the elderly and low-income individuals.
There is also a practical security advantage with cash. Although debit and credit cards often have personal identification numbers (PIN) and chips for extra security, there is less risk of identity theft or your information getting stolen online when using cash.
Cash-in-hand payments are legal but must follow strict tax and employment law rules. You must deduct and report tax and National Insurance and ensure staff receive payslips and legal entitlements. Staff must agree to be paid in cash, and you must treat it as net pay, not gross.
Tesco, Asda and Sainsbury's have stopped accepting cash in some stores and supermarkets - with shoppers warned. Last year, Tesco announced it would be going cashless at 40 UK cafe sites. Asda has also gone cash-free in nearly 270 petrol stations, where customers can only pay by card at the pumps to fill up.
Chosen participants in this trial will receive exclusive Your Clubcard Prices bargains every Wednesday through the Tesco app. They'll have the opportunity to utilise these offers multiple times but the discount will expire in seven days.
Is it legal to refuse cash? In the UK it is not illegal for businesses to refuse cash as payment and, in the same breath, it's not illegal for them to refuse card payments, either. The only situation where this isn't the case is when a business is accepting payment for a debt.
UK Finance research has shown that 39% of adults live an almost cashless life. As well as predicting that cash payments in the UK will continue to decline, and that by 2031, cash will account for 6% of all payments.
According to studies conducted by the Federal Reserve, cash usage has been on a steady decline. In 2021, cash was used for approximately 20 percent of all transactions. Fast forward to 2024, and the downward trend persists, with reports indicating that cash payments now represent a mere 16 percent of all transactions.
What happens if you get caught getting paid cash in hand?
What happens if I get caught working cash in hand? You can face prosecution for tax evasion. You can be fined or in some circumstances face imprisonment. If you have had fines for tax evasion, it may affect your ability to obtain credit or secure employment in the future.
How does HMRC track income so well? It uses cross-referencing. Connect flags it if your reported income doesn't match your spending or lifestyle. It's good at finding unreported earnings, errors in VAT returns, and unusual cash deposits.
Whether you get cash in hand or money paid straight to your bank account, you'll need to tell HMRC so you can avoid any tax surprises. We're talking about the total income from all your side hustles between 6 April 2024 and 5 April 2025. This is the amount you earn before factoring in expenses.
