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Sorry for delay in replying, thank you everyone for your answers. I took the matter up with Bank of England (emailed them and they emailed reply back). I quote here the email I received back from them to clear the matter up ;
Thank you for your mail. Scottish, Northern Irish, Channel Island and Gibraltar banknotes and coins are not legal tender in the UK.
The term legal tender, however, does not in itself govern the acceptability of banknotes in transactions. In the UK, whether or not notes have legal tender status, their acceptability as a means of payment is essentially a matter for agreement between the parties involved. Legal tender has a very narrow technical meaning in relation to the settlement of debt. If a debtor pays in legal tender the exact amount he owes under the terms of a contract, he has good defence in law if he is subsequently sued for non-payment of the debt. In ordinary everyday transactions, the term ‘legal tender’ has very little practical application. People are also often willing to accept payment by cheque, standing order, debit or credit card for example – in fact, by any instrument that they are confident will deliver value – but these, too, are not actually legal tender items. Anyone in the UK can refuse acceptance of a banknote or coin in payment for goods or services, without necessarily giving a reason for so doing.
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Thanks again everyone for your replies.