The Christmas decorations are now all packed away and your new years resolutions may be already broken, but the good news is that you have plenty of time to get your 2013 finances in order and make 2013 a prosperous and successful one.
Here are a few things for you to consider:
Use your ISA allowance to the maximum
ISA’s are simple saving and investment accounts which allow you to save tax free. If you can, make full use of your ISA allowance for 2012/13 before the deadline of 5 April 2013. Plus use your 2013/14 allowance if you can.
Check your Interest rates on your savings accounts
Interest rates have been historically low for years now and often banks will tempt you to save with them offering you a bonus rate, for a short period of time, then reverting to a poor rate. Check this doesn’t apply to your saving accounts.
Review your mortgage
You maybe able to get a better deal on what is most peoples biggest monthly expense. If you last reviewed your mortgage in 2011, you should be surprised with the better rates on offer, as deals got better in 2012 and are expected to continue into 2013.
Consider switching banks
Switching banks can be difficult, but from September 2013 it should become easier and maximum switching time should be seven days.
Banks normally rely on customer apathy to keep their customers, and normally offer a switching bonus or better saving rates.
Review your Pension arrangements
Pensions are generally a tax efficient investment and contributions should be maximised depending on your personal circumstances.
If you are an employee, contractor or freelancer, then your employer or Limited company may offer you childcare vouchers. These are deducted from gross salary which will mean a tax and national insurance saving fro you which normally works out to around £11 per week.
Enterprise Investment Schemes
Enterprise Investment Schemes offer investors tax breaks for putting money into smaller companies. They are really only for sophisticated investors and can result in significant income tax savings. Investors can put up to £1million into a qualifying start up firm and receive up to £300,000 i.e. 30% income tax relief if the investment is held onto for at least three years. Another tax aspect of Enterprise Investment Schemes is any gains are exempt from Capital Gains Tax and Inheritance Tax providing the investment has been held for at least two years.
Venture Capital Trusts
A Venture Capital Trust (VCT) will invest in start up companies. An investor who invests in a VCT and holds onto their investments for five years will get 30% income tax relief on up to £200,000 of income i.e. £60,000 of relief, also the dividends do not attract tax and any gain is exempt from Capital Gains Tax.
Seed Enterprise Investment Schemes
These are for small companies with assets of under £200,000. If you invest in a qualifying company then you can have income tax relief of 50% on up to a maximum investment of £100,000.