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LIVING IN ITALY

Banking giant Barclays to close accounts of Brits living in Italy

UK nationals living in Italy have begun to receive letters from their bank telling them that their accounts will be closed, in an apparent post-Brexit change.

Banking giant Barclays to close accounts of Brits living in Italy
A branch of Barclays Bank in London. Barclays has written to customers resident in the EU to inform them it will be closing their accounts. File photo: Peter Nicholls/Reuters/Ritzau Scanpix

Customers of Barclays Bank who are living in Italy have received letters telling them their UK accounts will be closed by the end of the year. 

There does not appear to be an option to register for a different account.

Several readers of The Local have reported receiving letters or messages via online banking telling them that their accounts would be closed because of their residency status.

A Barclays spokesperson told The Local:As a ring fenced bank, our Barclays UK products are designed for customers within the UK.

“We will no longer be offering services to personal current account or savings customers (excluding ISAs) within the European Economic Area. We are contacting impacted customers to give them advance notice of this decision and outline the next steps they need to take.”  

Customers are being given six months to make alternative arrangements. The changes affect all personal current accounts or savings accounts, but do not affect ISAs, loans or mortgages.

Photo by Tolga Akmen / AFP

During the Brexit transition period Barclays closed Barclaycard accounts of customers in Europe, but did not indicate any changes to standard bank accounts.

Around the same time several other British high street banks began closing accounts of British customers who live in the EU, although with the exception of Barclaycard customers in Italy were largely spared.

READ ALSO: Is new court ruling the end for Britons fighting to remain EU citizens?

The majority of UK nationals who live in Italy maintain at least one UK bank account – in addition to an Italian account – sometimes just for savings but others use their accounts regularly to receive income such as pensions, income from rental property, or salaries if they work remotely.

Not having a UK bank account can make financial transactions in the UK more complicated or incur extra banking fees.

Since Brexit, the UK banking sector no longer has access to the ‘passporting’ system which allows banks to operate in multiple EU countries without having to apply for a separate banking licence for each country.

And it seems that many UK high street banks are deciding that the extra paperwork is not worth the hassle and are withdrawing completely from certain EU markets. 

When British banks began withdrawing services from customers in the EU back in 2020, a UK government spokesman told British newspaper The Times that “the provision of banking services is a commercial decision for firms based on a number of factors” so Brits in Italy probably shouldn’t hold their breath for any help from that direction.

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MONEY

EXPLAINED: Why people in Italy might have to carry more cash from now on

Under Italy’s new budget law, retailers will no longer be fined for refusing card payments on amounts lower than €30 – a controversial move that is expected to have a knock-on effect for shoppers.

EXPLAINED: Why people in Italy might have to carry more cash from now on

Italy’s new budget bill, whose full text was made available to the media on Wednesday, is set to add yet another controversial chapter to the country’s long and troubled history of card payment laws.

According to a clause included in the 2023 budget law, fines for retailers refusing card payments on amounts lower than €30 will now be suspended until at least June 2023.

As set out by the bill, the six-month suspension will allow the newly created Ministry of Enterprises and Made in Italy to “establish new exemption criteria” and “guarantee the proportionality of the given penalties”. 

READ ALSO: Key points: What Italy’s new budget law means for you 

And, though it isn’t yet clear what new exemptions the government is currently considering nor what exactly is meant by “proportionality”, what’s certain is that residents will now have to repopulate their pockets with some good old banknotes because businesses – from taxi drivers to cafes and bars might not accept card payments for small amounts.

Fines for businesses caught refusing card payments had been introduced by Draghi’s administration back in June 2022, with retailers liable to pay “a €30 administrative fee plus four percent of the value of the transaction previously denied”, regardless of the amount owed by the customer. 

Euro banknotes in a wallet

Under Italy’s new budget law, retailers will no longer be forced to accept card payments for transactions under €30. Photo by Ina FASSBENDER / AFP

But, the measure had quickly sparked outrage among retailers, who lamented having to pay hefty bank commissions on every electronic transaction – some business owners even went as far as openly defying the law and organised themselves into a No-Pos Committee (Comitato No Pos). 

Given the latest developments, it seems like their efforts might just have paid off. 

But, while many business owners will surely be happy with the suspension, others across the country have already raised doubt about the potential ripple effects of the government’s move.

Aside from shoppers having to begrudgingly carry more cash than they’re currently used to, many political commentators are warning that the suspension might be a “gift to tax dodgers” in a country where, according to the latest available estimates, tax evasion costs state coffers nearly €90 billion a year.

READ ALSO: EXPLAINED: What’s changing under Italy’s post-pandemic recovery plan? 

It’s also worth noting that the introduction of fines for businesses refusing card payments was one of the financial objectives set out within Italy’s Recovery Plan (PNRR), which expressly refers to the fight against tax evasion as one of the country’s most urgent priorities. 

It is then likely that the new cabinet will at some point have to answer for the latest U-turn on Recovery Plan policies in front of the EU Commission.

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