As a new year begins, many people will be keen to get their finances in order.

Jason Hollands, managing director of Bestinvest gives his suggestions regarding getting your personal finances ‘back on track’ in the New Year.

  • File your tax return online by 31 January

It is human nature to leave tedious form filing until the last minute and in the case of self-assessment returns for the 2018/19 tax year, the final date to do this online is 31 January. Miss this by merely a day and you will be hit with an unwelcome fine and thereafter a daily penalty. Any additional tax owed will also be due by 31 January, so it really does make sense to get on to this as a top priority in case you need to find cash to pay a bill at short notice. .

  • Review your regular outgoings

It is so easy over time to amass a vast number of, often small, incidental subscriptions to organisations, magazines or services that you may find you could live happily without. You may also find that you can get a much better deal on things like your broadband service, insurance, utilities or mortgage by shopping around or asking if you are on the existing provider’s most competitive tariff.

  • Track down missing pensions and investments

Few people now work for the same employer across their working lives and as they change jobs every few years, they can also end up collecting a vast mishmash of different pensions. It is all too easy to forget to update previous employers from many years ago of your latest address and this may mean losing track of pension pots.

Tracking down these potentially valuable schemes should be an important priority in getting your finances in order, not just so you can see their value and assess how well they are doing but also because pensions have a become a lot more flexible in recent years but many older, legacy schemes may not be set up to enable you to benefit from these changes and you may not have nominated a beneficiary in the event of your death at the time when they were opened for you.

Few people now work for the same employer across their working lives and as they change jobs every few years, they can also end up collecting a vast mishmash of different pensions. It is all too easy to forget to update previous employers from many years ago of your latest address and this may mean losing track of pension pots.

  • Review and detox your existing portfolio before making further investments

One of the biggest mistake’s investors make is getting caught up in the end of tax year frenzy and choosing investments on an ad hoc basis. It is so easy to get distracted by whatever funds are flavour of the month without first considering how these might fit alongside an existing portfolio. It is however vital to understand your overall goals, risk appetite and strategy as a precursor to investing any new money into the markets.

Existing portfolios also drift over time as different investments held don’t all move in tandem, which can lead to a situation where the risk profile of a portfolio mutates into something very different from what may have originally been intended. And of course, individual investments that may have been worth backing in the past might need to be reassessed from time to time.

For these reasons, it is vital to review your portfolio and potentially give it the equivalent of a ‘detox’ at least once a year. If you are not already doing so this a is a really good time to seriously consider whether you should entrust your investments to a private client investment manager or adviser to select your holdings, monitor and adjust them throughout the year to make sure they remain suitable.

  • Maximise pensions

Pensions remain a highly attractive route to invest for the long term, especially for those subject to the higher rates of tax. Pension contributions provide tax relief at your marginal income tax rate, so a £10,000 gross subscription will only cost a 40% tax payer £6,000 after tax relief is received. In fact, pensions are so attractive for higher rate taxpayers, there is a perennial speculation that the generous upfront tax reliefs will eventually be withdrawn as these represent a significant cost to the Treasury that will grow as more workers are auto-enrolled into pensions, so use these while you can.

For those who have already maxed out their pension allowances, or reached the lifetime allowance, contributing to a pension for a spouse or children might be worth considering. Even non-earners can make a gross contribution of up to £3,600 a tax year, which means an outlay of just £2,880 which will then be topped up by the State to the tune of £720. Every little bit helps!

  • Utilise your ‘use or lose it’ ISA allowance

Individual Savings Accounts may not have the upfront tax reliefs of pensions, but they do have considerable flexibility as you can withdraw your investments at any time without a potential tax hit on the way out and the allowance is a now a meaty £20,000 per adult, enough for most couples to build a considerable, tax efficient investment portfolio.

If you are unsure where to invest or whether it is a good time to invest, this should not stop you utilising your ISA allowance. You can always fund the allowance initially with cash and then decide when and where to invest later. Investing on a regular basis, such as monthly, is a great way to overcome any jitters you may have about timing.

  • Make use of your capital gains allowances – the forgotten tax allowance

If you own investments outside of tax free-wrappers (ISAs and pensions), then you can crystallise returns this tax year of up to £12,000 without incurring capital gains tax. Many investors forget to utilise this potentially valuable allowance. There is some speculation that the Chancellor might raise capital gains tax in his February Budget as this was an area that was not subject to the Conservative manifesto commitment not to raise income tax, national insurance or VAT.

Don’t forget that married couples and civil partners can transfer investments to each other without any tax consequences, meaning two sets of capital gains allowances could be utilised. By regularly utilising your capital gains allowances, you can prevent the build-up of a potentially hefty future tax liability.

It might make sense crystallising gains and using the proceeds to fund ISA or pension contributions – a process known as Bed and ISA or Bed and Pension, so that over time as much of your investments as possible are sheltered in tax-efficient accounts.

  • Give yourself a tax cut

With the Conservatives having made some big spending commitments during last month’s General Election, the chances of significant income tax cuts any time soon are low. However, it is possible to reduce an income tax liability through subscribing to a pension or, for those already utilising pensions, through investing in Venture Capital Trust (VCT) new share issues and Enterprise Investment Schemes (EIS). Both VCTs and EIS are Government authorised schemes to encourage investment into fledgling UK companies and therefore while they offer attractive tax perks, they are higher risks investments and therefore not suitable for everyone.

This is a shorter version of the research supplied by Jason Hollands, managing director of Bestinvest.