HM Revenue & Customs is contacting at least 260 financial institutions in an effort to obtain detailed information on thousands of offshore bank account holders. Reduced penalties are being offered to those who come forward with undeclared tax in an effort by HMRC to 'wipe the slate clean'. The New Disclosure Opportunity, announced in the chancellor's budget in April, will give offshore bank account holders a chance to disclose and pay tax on their offshore income, offering incentives to those who declare unpaid tax. In 2007, a similar tax 'amnesty' was announced by HMRC, introduced when it issued formal notices to five major banks demanding the details of offshore account holders. The result was an average tax take of £189,000 for each case, leading the taxman to go on to issue these notices to smaller financial institutions in its latest NDO. It is claimed by HMRC that the tax yield from this could be as much as £500m over the next four years. Head of tax investigations at Smith & Williamson, Sue Holmes, said: 'This parallel onshore disclosure opportunity is good news for people who wish to disclose general UK income to secure a guaranteed low penalty. 'However, there is one major downside to the regime; HMRC will not guarantee immunity from prosecution even if disclosure is made. That said, the tax authorities will only consider prosecution in very serious cases, so for most individuals this is a good opportunity to clean the slate.'