Money in the UK: Cards, Cash, Taxi Payments, Tipping and Tourist Taxes

A city break can involve surprisingly little cash, but travelling with only a phone is a fragile plan. Watch for restaurant service charges, the way transport payments are registered and local accommodation levies. Tourist VAT refunds also depend on where you shop: Northern Ireland has different arrangements from England, Scotland and Wales.

London, United Kingdom · packing4two

Pounds, pence and different-looking notes

The currency is pound sterling, GBP, written £. One pound is 100 pence. Coins are 1p, 2p, 5p, 10p, 20p, 50p, £1 and £2. Current Bank of England notes are £5, £10, £20 and £50; valid polymer notes featuring Elizabeth II and Charles III circulate together.

Scottish and Northern Irish banks also issue sterling notes with different designs. A genuine note is not a guarantee of acceptance by every shop. Small Bank of England notes and a backup card are convenient when moving between regions. Northern Ireland uses sterling; the Republic of Ireland uses euros.

Can you manage without cash?

Visa and Mastercard are widely useful, and many terminals accept contactless cards, Apple Pay and Google Pay. Acceptance still depends on the merchant and your card. Some businesses are card-only, while others prefer cash; a shop is not generally obliged to accept your chosen payment method.

For an urban family trip, £30–£60 in backup cash can be a starting point, not a daily spending allowance. Adjust to your route. Ask rural accommodation, small stalls and local taxi operators how they take payment. Keep a separate physical card and know its PIN rather than relying entirely on a phone.

Currency conversion and cash machines

Check your card issuer’s foreign-currency and withdrawal fees before leaving. An ATM operator may charge separately. Compare how much money you receive after every charge, not just an advertised commission percentage.

If a terminal offers your home currency instead of GBP, it is offering its own conversion. Selecting GBP leaves conversion to your card issuer. Read the offered rate and fees rather than accepting automatically. Declining an ATM’s conversion does not necessarily remove its withdrawal charge. Cover your PIN and do not hand the card to someone offering unsolicited help.

Paying for taxis and app-booked rides

Licensed London taxis must have working card and contactless payment facilities. Do not assume this describes every private-hire car or taxi elsewhere in the UK: confirm payment arrangements and airport-related extras before travelling.

In the Freenow app, add a card to your wallet and select the payment method before ordering; available alternatives are shown in your account. Check whether the quoted price is fixed or estimated and whether booking fees apply. If payment is through the app, check the charge before paying the driver separately. A tip is discretionary; rounding up can be a simple option.

London transport: keep the payment device consistent

On the Underground, the DLR automated light railway serving Docklands, and other supported rail services, touch in and out using the same card or device. A phone and its linked plastic card are not interchangeable for this purpose. On London buses and trams, touch in only.

Each fare-paying traveller needs a separate payment instrument. Capping depends on the service and area, and does not cover every journey beyond London. Transport for London’s TfL Go app helps with journey information and managing the Oyster reloadable transport card. Keep enough battery to touch out; not every foreign-issued card is accepted.

Tips and restaurant service charges

For table service, 10%–15% is a customary tip when pleased with the service and no service charge has already been added. Read the bill first: you need not add another tip simply because the terminal suggests one. Ask whether an unclear service charge is discretionary.

Counter orders, takeaways and drinks ordered at a pub bar do not require treating a tip as mandatory. Choose according to the service and experience, even if a screen presents preset percentages. Checking before paying prevents accidentally adding two service payments.

Is tax included in displayed prices?

VAT due on ordinary retail purchases is included in the shop price. It is not automatically added at checkout in the way sales tax is in some other countries. The standard VAT rate is 20%, but other rates and exemptions apply.

As a calculation example, a £120 price including 20% VAT consists of £100 before tax and £20 tax. The tax is one-sixth of that inclusive total, not 20% of it. A business-facing quote may say Ex VAT, so check the basis of an unusual price offer.

Accommodation levies vary locally

Do not assume every local charge has already been paid with your room. Edinburgh has a 5% levy on the pre-VAT accommodation element for stays from 24 July 2026, covering the first five nights. Extras such as meals and parking are excluded from its basis. Qualifying bookings paid at least partly before 1 October 2025 are excepted.

This is not a single rule for all of Scotland or the UK. Check taxes, charges payable at the property and cancellation terms before booking. Request an itemised bill if the balance is unclear, and do not use the price of a previous holiday as a current quote.

Shopping in Great Britain: no normal luggage VAT refund

England, Scotland and Wales do not offer the ordinary tourist VAT-refund route for shopping carried home in your luggage. Direct delivery by a participating retailer to an address outside the UK may be an alternative, but delivery costs and destination import taxes matter.

When comparing the price of a London purchase, do not subtract an assumed airport refund. That assumption can make a supposedly good deal more expensive than expected.

Northern Ireland has separate refund arrangements

Visitors resident outside Northern Ireland and the EU may qualify for a refund on eligible personal goods from participating shops. Ask for a VAT 407(NI) form at purchase, keep receipts and present the goods and paperwork to customs. A receipt alone is insufficient. Export must take place by the end of the third month after the purchase month.

A Belfast-to-London trip is not the normal refund route. Airside onward transit through Great Britain, with checked luggage continuing to a non-EU destination, has special conditions to arrange in advance. Consumed services and hotel bills are not luggage purchases. The retailer or refund provider handles repayment and may deduct fees.

Budget for deposits and the full cost of a stay

Keep available card capacity for hotel or car-rental deposits. An authorisation hold is not necessarily a final charge, but can reduce spending capacity for several days. Keep return confirmations and receipts and compare the final charge with the booking.

Compare accommodation by total cost, including daily transport, breakfast, room size and location. On our 2022 trip, Novotel London Greenwich worked well for our family even with travelling to and from the centre at the start and end of the day.

We stayed here on our 2022 family trip. We preferred its spacious, comfortable rooms and the price we found compared with central options, accepting a journey at either end of the day. It is beside Greenwich station, not in central London. Check current room types and prices for your dates. Check rooms and prices on Trip.com