Barclays says customers face 'extra charge' due to little-known 'legal requirement'
Barclays has issued a warning to bank account holders and customers over a little-known "legal requirement". The high street bank has responded to a Barclays customer who received messages from the bank after setting up their new account.
They were told they had extra charges to pay. Taking to X, which was formerly known as Twitter until the rebrand, the customer said: "Why am I receiving these texts when my account was setup in branch and why are you trying to charge me to reply?"
They shared a screengrab of their phone screen with two text messages. One asked the customer to "reply 'yes', or 'no'" to confirm whether or not they are "solely a tax resident of the UK and is not a US citizen".
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The other message was a follow up saying: "Hi, we recently sent you a message about your tax residency information - please reply 'yes' or 'no' oto the following text. Your Barclays team." Barclays replied: "I can understand your concern especially if they were unexpected.
"We’re legally required to collect tax residency information for any customers that have access to the income and assets associated with our accounts. Rest assured the SMS is legitimate, please respond YES/NO based on your Tax residency status. Any costs incurred responding will be due to your current network provider."
This requirement results from international agreements designed to help tax authorities address tax evasion. This is particularly relevant if someone holds assets in countries where they’re not tax resident and may not be declaring those assets, or income, in their residence territory. Under these agreements, governments will exchange information about these assets and income with the residence territory.
All financial institutions are required by regulation to establish the tax residency of all account holders, identify any possible connections for tax purposes with any other countries and report the financial account information of customers to the relevant tax authorities.