These are recognised currency in Scotland and are, in theory, generally acceptable throughout the UK. However, many people outside Scotland are unfamiliar with the notes and they may often be refused. Branches of the Scottish note-issuing banks situated in England dispense Bank of England notes, and may not dispense their Scottish notes from those branches.

In Northern Ireland by:

the Bank of Ireland; First Trust Bank; Northern Bank; Ulster Bank;

;

These are rarely seen outside Northern Ireland. They are often not accepted in England and Wales without some explanation.

Sterling banknotes are also issued in local designs by the following British dependencies outside the UK:

The Isle of Man; States of Jersey; States of Guernsey;

The following currencies are distinct under ISO 4217 but are at par with Sterling.

Gibraltar; Saint Helena; Falkland Islands;

Bank of England notes are the only banknotes that are legal tender in England and Wales. Scottish, Northern Ireland, Jersey, Guernsey and Manx banknotes are not legal tender in England and Wales. However, they are not illegal under English law and creditors and traders may accept them if they so choose.

In Scotland and Northern Ireland no banknotes – not even ones issued in those nations – are legal tender, although Bank of England one pound notes were when they existed: Bank of England notes of under five pounds value are legal tender. Scottish and Northern Irish notes are 'promissory notes' (defined as legal currency), essentially cheques made out from the bank to 'the bearer', as the wording on each note says.

The UK Treasury has proposed extending legal tender status to Scottish banknotes. The proposal has been opposed by Scottish nationalists who claim it would reduce the independence of the Scottish banking sector.

Most of the notes issued by the note-issuing banks in Scotland and Northern Ireland have to be backed by Bank of England notes held by the issuing bank. The combined size of these banknote issues is well over a billion pounds. To make it possible for the note-issuing banks to hold equivalent values in Bank of England notes, the Bank of England issues special notes with a denomination of one million pounds for internal use by the other banks.