The government is halving the dividend tax allowance, Chancellor Jeremy Hunt has announced, falling from £2,000 to £1,000 next year and to £500 from 2024.

Delivering his Autumn Statement at the House of Commons today, Hunt also said that annual capital gains exemption will fall from £12,300 to £6,000, and then to £3,000 from April 2024.

Think tank Capital Economics had said that another possible measure would be raising the dividend tax rate by 1.25 percentage points across all three tax bands, but Hunt did not confirm this in his speech. 

The chancellor also announced the government will freeze the employers' NICs threshold until April 2028. However, it will retain the Employment Allowance at its new, higher level of £5,000.

According to Hunt, some 40% of all businesses will still pay no NICs at all. Meanwhile, the VAT registration threshold will be maintained at its current level until March 2026. 

Other measures include a series of "stealth" raids on income tax. The chancellor has also lowered the threshold at which people pay the 45p rate of income tax from £150,000 to £125,140. 

According to Capital Economics, day-to-day public spending will be reduced from 3.7% to 1% from 2024. The Times reported that most of the spending cuts will be pencilled in for after the election in the hope they can be cancelled if economic conditions improve. 

A month ago, Hunt, who was appointed Chancellor of the Exchequer on 14 October, ripped up the bulk of former chancellor Kwasi Kwarteng's Mini Budget, reversing nearly all the tax measures introduced in the 'Growth Plan' unveiled on 23 September. 

The measures he reversed included the £6bn cut in the basic rate of income tax, changes to dividend taxes, a VAT tax break for foreign shoppers and a freeze on alcohol duty.