The last pre-election Budget in 2001 was a triple whammy for the government. Gordon Brown managed to maintain a surplus. He largely avoided accusations of electoral bribery. And he boosted two of Old Labour’s favourite areas: health and education.

This time round he faces a much tougher balancing act. But in his ninth Budget since Labour came to power in 1997, Brown is expected to put pensioners, parents and children at centre stage.

Coming on March 16, the Budget will arrive just seven weeks before a general election which is widely believed to be scheduled for May 5. But It is less certain that this Budget will receive such a warm welcome from the electorate.

There is widespread spread speculation that there is a £12.5bn black hole in the public finances and that consequently Labour will have to raise taxes if it wins the election. Accountants warn Brown may fall victim to his own self-imposed Golden Rule which states that over the economic cycle the government will only borrow to fund investment, not current spending.

“The chancellor may regret setting his Golden Rule as he looks increasingly likely to break it or face the prospect of raising £12.5bn in taxes to plug the ‘black hole’,” says Stephen Herring, tax partner at BDO Stoy Hayward.

This week Ed Balls, the former chief economic adviser to the Treasury, appeared to indicate that the chancellor was in a position to embark on a pre-election giveaway. Balls said Brown was in a position to meet his fiscal rules “with margin to spare”, adding: “I hope more can be done to support families, pensions and our other priority areas.”

But even if the chancellor does have some scope for election some sweeteners, it is well-known that pre-election tax cuts have a history of being are often clawed back soon afterwards.

“Every general election year since 1979 voters have been offered a package of sweeteners in the final Budget of the parliament,” says Aidan O’Carroll, head of tax at accountants Ernst & Young. “In many cases taxes were increased soon after the general election result. While no chancellor can be expected to increase taxes immediately before an election, even Brown’s own figures show he has little margin for tax cuts. Changes made for political reasons tend to add complexity to the tax system and taxpayers need certainty and stability.”

More likely, Brown could raise income tax thresholds to benefit low and middle earners – a key target group for Labour. He may also implement changes to property stamp duty to help first time buyers and take steps to help pensioners, perhaps by raising the winter fuel allowance.

But experts are not expecting big surprises. They say Brown is a politician after all and that he is constrained by political reasons from doing anything that might jeopardise risk the election.

“Speculation is already looking beyond the chancellor’s statement to an election in May, leaving a question mark over the content of the Budget. Will we see any real changes or is it just a housekeeping exercise before the main event?” asks John Whiting, a tax partner at PwC.

“This does not mean that there will be no tax changes in the Budget: far from it. There are always a number of things in hand – indeed the 2004 pre-Budget report launched a number of items which we may well get progress reports on. Overall we expect the theme to be ‘steady as she goes’ with the clear message that all is heading in the right direction.”

If the chancellor needs to raise serious money then accountants suggest the only candidates are income tax, national insurance contributions and VAT. “The big money is in NIC but that’s already been raised so it is probably off the agenda. And raising income tax does not fit in with manifesto rules, so the only option open to him is VAT,” says Whiting.

The UK has one of the lowest standard rates of VAT in the EU and there has been some suggestion that the chancellor could increase the rate there, spreading the cost among everyone.

In every year the usual calls for inheritance tax to be reformed are repeated and this year is no different.

“Dramatically rising house prices have forced more people into the IHT net than ever before,” says David Cripps, partner at Moore Stephens. “The government might raise the nil rate band or introduce an intermediate secondary rate. Increasing pressure from the media and think-tank proposals surrounding the pre-budget report suggest that this could be a vote-winning strategy before the general election.”

Others are clamouring for stamp duty to be changed to reflect the boom in property prices. Recent reports have shown that revenue from stamp duty has risen from £465m in 1993-4 to an estimated £4.3bn in the current tax year.

“The lower band is set at 1 per cent on properties sold for £60,001 to £250,000, which is pricing many first-time buyers out of the market,” says Glenn Martin, senior tax manager at Moore Stephens. “We think this band should be abolished for first-time buyers, to help them take their first step on the property ladder.”

However, he believes that if the government is to take any action, it is more likely that stamp duty will be charged on a progressive basis in the same way as income tax. For example, a property sold for £360,000 would suffer stamp duty at 1 per cent on the £60,001-£250,000 band and at 3 per cent on the balance, a total of £2,200, rather than £7,800.

More work on residence and domicile, affecting the tax treatment of wealthy foreigners living in the UK, is also expected. At the moment the UK can be an attractive place to work for non-UK domiciled individuals. But experts are predicting that the concept of domicile could be abolished altogether and replaced with an extension of the definition of residence or ordinary residence to identify shorter-term visitors.

There is also the expectation that the government may introduce specific tax breaks targeted towards those groups of individuals they would like to attract to the UK that may otherwise be discouraged from moving to the UK.

Childcare could also come under the spotlight. “Given that one of the focuses of attention is on children,One could envisage more money going into the child support section,”whilst repeating or taking forward some of the ideas within the discussion paper on the Ten Year Childcare Strategy, published with the pre-Budget report,” says Whiting.

Savings could also be an important Budget theme, with a new pilot for Saving Gateway, the scheme for low-income savers. The chancellor may also confirm that the individual savings account allowance will stay at £7,000 and 2009 and give news of the stakeholder suite of savings schemes available in April.

But, whatever people predict One thing is for certain: the chancellor always has the last word If there is one certainty in this year’s budget, it’s that and there is bound to be at least one big surprise.