Replicating the Chancellor’s tax rise for high earners in Scotland would bring in £40m a year – but may actually leave the nation’s budget worse off, economists have warned.

In its analysis of the Autumn Statement, the Fraser of Allander Institute said lowering the threshold of the top rate of tax would be far less effective at raising revenue in Scotland.

It said this was because a “much smaller share” of the population in Scotland pays the top rate of income tax compared to the UK, where the move will raise significantly more.

Economists at the FAI also believe that replicating the tax rise could actually cost the Scottish Government more in lost funding from the UK than it will raise from taxpayers.

This is because Scotland’s block grant from Westminster is reduced based on how quickly revenues of the corresponding tax have grown in other parts of the UK.

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