Experts warned that people could be deterred from moving to work in Scotland
Accountants said the decision to force higher rate taxpayers to pay more than counterparts south of the Border may hinder firms in hiring “top talent”.
The warning came on the start of the new tax year, with a freeze in the threshold for the higher 40p rate at £43,000.
This rose to £45,000 in England, Wales and Northern Ireland leaving some 368,000 Scots £400 a year worse off than if they worked elsewhere.
Finance Secretary Derek Mackay was today forced to defend the £107 million raid as he again ducked responsibility for Scotland’s ailing economy.
In a stumbling radio interview the Nationalist minister repeatedly blamed June’s Brexit vote for plummeting consumer confidence as he was pressed on why the country is on the brink of recession.
But critics have hit out at his party’s “high tax agenda” and for creating uncertainty with demands for another independence referendum.
The SNP made the country the highest taxed part of the UK
Dire figures released on Wednesday show the economy north of the Border contracted by 0.2 per cent in the last three months of 2016 – when the UK economy grew by 0.7 per cent.
Many Scottish taxpayers will be experiencing more challenging circumstances
Scotland will officially be back in recession for the first time since 2012 if the economy is shown to have contracted in the following three months.
Business leaders have called for more action in cutting rates and lowering the tax burden on hard-working families.
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Derek Mackay blamed the Brexit vote for plummeting consumer confidence
The Association of Chartered Certified Accountants today said Holyrood’s new powers “create further complexities”.
Referring to the higher rate freeze its head of taxation Chas Roy-Chowdhury said: “Combined with rising rates for many small businesses, many Scottish taxpayers will be experiencing more challenging circumstances just as Brexit negotiations get underway.
“Meanwhile, the potential for future divergences could harm the competitiveness of Scottish firms in terms of attracting top talent.
“Providing assurance that the Government will seek to keep the tax system as simple as possible will help alleviate some of these pressures.”
He added: “As a result of public revenues now more closely linked to economic performance, Holyrood needs to maintain a cautious approach.
“With air passenger duty and a greater share of VAT revenue due in coming years, the Government will have to invest wisely in strategies which will grow the economy long-term whilst resisting the urge to further complicate the tax system.”
Brexit: Results of how the UK voted Mon, March 20, 2017
Much of the North East of the United Kingdom voted to leave the European Union including Sunderland, Gateshead, Darlington, Durham, Hartlepool, Middlesbrough, Stockton, Redcar and Cleveland, North Tyneside and South Tyneside, and Northumberland
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GREAT YARMOUTH: The town of Great Yarmouth on the East Coast of England voted by 72% to leave the European Union.
Mr Mackay has previously hinted he could raise taxes even further in the future and insisted the grab will help “protect” SNP giveaways such as free university tuition, personal care and prescriptions.
Challenged on the BBC’s Good Morning Scotland programme today he claimed there was not a “substantial divergence” in rates while “raising revenue to be able to invest in our country”.
With the rest of the UK thriving, economists have undermined SNP claims the vote to leave the EU is responsible for Scotland’s woes.
But repeatedly pressed on the issue Mr Mackay said: “I think there is a number of complex issues here. I think there is a reaction to the Brexit vote.
“I think its in part down to the downturn in oil and gas which has impacted on other sectors as well.”
Critics have hit out at his party's 'high tax agenda' and for creating uncertainty
Tories said it was “astonishing” that Mr Mackay was “refusing to take responsibility” and accused the SNP of an “anti-growth style of governing that frowns upon hard work.”
Scottish Conservative chief whip John Lamont added: “It sounds like Derek Mackay is blaming everyone but himself for the SNP’s woeful performance.
“As has been made clear, Brexit can’t possibly be the reason Scotland sits on the edge of recession, as the economy across the rest of the UK is powering ahead.”
James Kelly, Scottish Labour’s business manager, said: “Derek Mackay was an absolute shambles on the radio with this car crash interview.
“The reality is the SNP has mismanaged our economy for a decade, and the threat of another divisive independence referendum is creating even more uncertainty for our economy.”
The Scottish Government insisted it was “making taxation fairer and more proportionate” and said it would ensure “99 per cent of adults will pay no more tax, given their current level of income, than in the last financial year”.