A couple years ago in London, I seriously confused a young retail clerk by presenting her with Scottish banknotes presumably left over from an earlier trip to Edinburgh. She had to go get her supervisor to assure her that this was indeed real money.
OK, it's more "real" than an IOU I hand you, because I know that in order to issue their IOU they actually had to deposit an equivalent amount of cash with the Bank of England, but it's not legal tender -- while in practice pretty much anyone should be comfortable using it as a medium of exchange, the only _guaranteed_ use of a Scottish note is to exchange it with the issuer for a Bank of England note (or, in Scotland, coins), which you can then proceed to use to pay your taxes or other bills because they _are_ legal tender (value limits apply to specific denominations south of the border, you need to use pound coins north of the border).
But yes, in practice, real money. Just don't try telling anyone they've _got_ to accept it, because there's no such obligation.
No retailer has to accept anything. I can set up a shop in London that only accepts Scottish banknotes and not English ones. Or that only accepts Mexican Pesos or Bitcoin for that matter.
From the Royal Mint's website:
> Legal tender has a very narrow and technical meaning in the settlement of debts. [...] It does not mean that any ordinary transaction has to take place in legal tender or only within the amount denominated by the legislation. Both parties are free to agree to accept any form of payment whether legal tender or otherwise according to their wishes.
I know -- that's what I was trying to convey when I said "pay your taxes or other bills", because those are (pretty much) the only times when you can require someone to accept money from you, and consequently the only times the concept of "legal tender" could even possibly come into play. Even then, most creditors are happy to take payment in any convenient form :).
Most of the time most of the people are happy to accept anything that's a properly denominated bank note. But while I'll happily try to spend Scottish notes down South, there's no requirement on any shops to accept them.
Edinburgh Council have recently done something interesting though: they've stopped (in most locations) accepting cash for payment of bills. Now I'm wondering if I should cancel my direct debit and take them a stack of pound coins :).
I have had to tell shopkeepers on a few occaisions that if I was going to be forging money, it probably wouldn't be notes that almost nobody in England actually recognises.
