IT’S spring, the sun is shining, and all’s well with the world. Well, not quite; there is tomorrow’s budget to contend with.

George Osborne will be delivering his penultimate budget before the next election and the last which will realistically have some impact on voters.

There still does not seem to be that much held in reserve for a spree of pre-election gifts to individuals or businesses beyond what has already been announced.

For companies the main corporation tax rate falls to 21 per cent, with effect from 1 April, and will be 20 per cent in April 2015.

This is countered by the reduction in the Annual Investment Allowance which allows businesses to offset currently the first £250,000 of capital expenditure on equipment.

This is due to fall to only £25,000 pa after December 31, 2014. Extending this for another year or longer may be one way of underpinning the recovery by allowing businesses to invest.

It is unlikely that businesses will see further increases in the 225 per cent Research and Development tax credits tax deduction for small and medium sized businesses or the Patent Box regime, which taxes patent profits at ten per cent.

Businesses however are likely to benefit from the Autumn Statement’s announced one-off National Insurance employer’s £2,000 holiday.

Again there is unlikely to be much more to say about vehicle excise duties or business rates other than that announced in the Autumn Statement.

Tory grandees have recently been vocal in the press about more tax payers being dragged into the 40 per cent higher rate income tax band as a result of the increases to personal allowances. A vote winner for the already squeezed middle income earner may be to reverse this trend.

George will have a “rabbit” to pull out of the hat, but he is keeping it well under wraps.