Because of the implications of using Manchester LETS might potentially have on benefits claimants as a form of alternative currency, we contacted the Revenue and Benefits Unit of Manchester City Council in regard to their stance on Local Exchange Trading Schemes.

They have a small mention of LETS on the Manchester City Council website: "We also count any other money you have coming in [when calculating benefits]. This includes credits or tokens from Local Exchange Trading Schemes (LETS). Providing services in LETS counts as work and we treat the credits as earnings which we need to value." Click here for more.

You can also read guidance on Local Exchange Trading Schemes from the Department for Work and Pensions which is available to read on the internet - http://www.dwp.gov.uk/docs/hbgm-bw2-assessment-of-income.pdf (See paragraph W2.97)

Benefits claimants therefore need to ensure that their participation in Manchester LETS takes into account their circumstances and they are comfortable with that.

Non-regular activities of different kinds should not be of interest to the Inland Revenue. Currently the vast majority of LETS transactions are of this type, and should be regarded as "social favours".

As a general rule, individuals will be liable for tax on profits if they are providing regular commercial services according to their normal trade or profession. Since the Inland Revenue can only accept sterling, such traders are entitled to ask a sterling proportion (e.g. 25%) in a LETS trade to cover tax. (The same applies to VAT).

Because of the implications of using Manchester LETS might potentially have on asylum applicants as a form of alternative currency, we contacted the UK Border Agency at the Home Office in regard to their stance on Local Exchange Trading Schemes. Their reply is excerpted below.

"Please be advised that information on asylum employment condition is available at the link below:

http://www.ukba.homeoffice.gov.uk/asylum/support/employment. However, we do not have any information on A Local Exchange Trading Scheme. Individual asylum seekers will need to contact their case owner for further information.

Alternatively, please contact the asylum support customer contact centre on 0845 602 1739."