Time is running out for UK holders of Swiss bank accounts who face being slapped with massive financial penalties if they fall foul of the UK/Swiss Tax agreement.

That's the warning from experts at Crowe Clark Whitehill who warn that many compliant account holders will be caught-out by the levy, as many may not understand that the agreement applies to all UK Swiss bank account holders.

The UK/Swiss Tax agreement, which came into force on 1 January 2013, aims to address the issue of non-UK-tax-compliant assets held or managed in Switzerland. However, all accounts, whether compliant or not, will be hit with a one-off levy between 21% and 41% of the total account balance if they are not declared before the 31 May deadline.

John Cassidy, tax investigations partner at £59.3m firm, said: 'Many Swiss account holders in the UK will be in for a nasty surprise come 31 May. Even if they are fully tax-compliant it is ill-advised to ignore the measure, or assume that they won't be affected. If the account holder does not authorise the Swiss bank to disclose the investments to HMRC before the deadline, the levy will be made on all accounts regardless and there is no way to reclaim the charge, even if the holders can prove themselves to be compliant at a later date.'

'The measure even extends to those who no longer live in the UK, depending on if or when the Swiss bank was informed of their change of address.'

This warning comes three months after a Crowe Clark Whitehill survey revealed 65% of accountants had little or no understanding of the options available to UK residents holding Swiss bank accounts.

Cassidy said that while it was 'a very niche area' it was not too late to take action.

'If an account holder is tax-compliant, all that is required is to fill out a very simple form, available through the Swiss bank they hold their account with, prior to the 31 May deadline. The anonymity of their Swiss account will be lost, as account details will have to be disclosed to HMRC, but the levy will not have to be paid.

'If the account holder is non-compliant, other alternatives, such as the Lichtenstein Disclosure Facility, are available as a potential avenue to disclose any tax irregularities, offering far more certainty than the UK/Swiss Agreement levy, usually at a lower cost.'