I WROTE last month about the importance of taking time to review your finances. With an election looming this is more important than ever.

Tax will be a major issue in the run up to the election and the major parties will be setting out their tax plans over the coming weeks.

I recently attended the Institute for Fiscal Studies ‘Green Budget’ which runs an independent eye over the UK’s finances.

IFS director Paul Johnson said: “History suggests that General Elections tend to be followed by tax rises. The first year after each of the last five elections has seen the announcement of net tax rises.” There is little reason to think that history will not repeat itself in 2015.

The problem the next Chancellor – whoever he or she is – will face is huge.

While you will hear much talk of the deficit over the next few weeks it is important to remember that the deficit is the difference between what the government will spend and what it will receive this year.

It is not the amount the country owes, but rather the amount that will be added to what we already owe. And we owe a staggering £1.5trillion. The interest is around £1billion every week.

So what are the obvious targets? A mansion tax? Perhaps, but the amount it would raise is a small drop in a very large ocean. An increase in the top rate of income tax? Possibly, but again the amount that is likely to raise won’t go far. The Chancellor will need to find bigger levers to pull.

My guess is that after the election the Treasury will be asked to look at a number of unpalatable options. One is likely to be higher rate tax relief on pension contributions. Before every Budget I can recall this has been seen as a potential target, as the cost to the Exchequer is substantial. I can’t see it surviving the next Parliament completely unscathed.

Another area is VAT. The UK currently excludes a significant range of things from VAT. A radical Chancellor could re-look at some of them.

There are also some business reliefs (both for capital gains tax and inheritance tax) that may come under the microscope.

If your financial planning depends on a major tax relief, it would be prudent to talk things over with your adviser – and the sooner the better.

Paul Aplin OBE is a tax partner with A C Mole & Sons and chairman of the Technical Committee of the Institute of Chartered Accountants in England & Wales Tax Faculty; you can follow him on Twitter @PaulAplinOnTax. He and fellow tax partners Amanda Gunter and Paul Kingdom can be contacted on 01823-624450.