More than half a million Scots are already paying extra income tax compared to workers earning the same salary in England, according to official estimates that prompted criticism of Nicola Sturgeon's plan for another increase.
The National Audit Office (NAO) predicted that 507,000 people north of the Border will pay more income tax than their English peers in the 2017/18 financial year thanks to the SNP government's decision to freeze the salary threshold for the 40p higher rate.
On average, they are being charged an extra £213 income tax compared to workers in England, where the UK Government has increased the threshold to £45,000 to prevent middle-class workers being dragged into the 40p band by their annual salary increases.
The report found that 152,000 of the Scots paying more - those earning between £43,000 and £45,000 - would only be charged the 20p basic rate if they lived elsewhere in the UK.
The remainder of the 507,000 affected earn more than £45,000 and would also be liable for higher rate tax in England. However, more of their salaries are subject to the 40p rate thanks to the lower threshold in Scotland.
It is the first year that Ms Sturgeon's administration has had control over income tax rates and bands on earnings and Scots have been forced to pay more compared to what is levied elsewhere in the UK.
However, the gap is expected to dramatically widen in 2018/19 after Ms Sturgeon unveiled proposals earlier this month for those earning as little as £24,000 to pay more income tax. The crossover point will increase to £31,000 if the UK Government presses ahead with plans to raise the personal allowance.
The NAO report said HM Revenue & Customs (HMRC) does not expect the cross-Border difference in tax bills to lead to avoidance or evasion by Scottish workers in the current financial year. However, it plans to increase "compliance activity" in future if income tax rates in Scotland and the rest of the UK "diverge more substantially."
It also disclosed that the taxman will have to manually adjust everyone's tax code next year so they get the correct relief on their pension contributions, should Ms Sturgeon choose to increase the basic rate.
The business backlash against Ms Sturgeon's plan for a hike next April continued to gather pace yesterday after it emerged that four of Scotland's most respected business leaders have written a joint letter to the First Minister warning the move would damage the economy and lead to an exodus of skilled staff.
Sir Iain McMillan, the former CBI Scotland director, Jack Perry, the former chief executive of Scottish Enterprise, construction magnate Anthony Rush and Rhona Irving, a former PwC tax partner, cautioned against using hard-working Scots as 'cash cows', and say the country could be plunged into another recession.
Murdo Fraser, the Scottish Tories' Shadow Finance Minister, said: "This report makes clear that half a million taxpayers in Scotland are now paying more than their counterparts elsewhere in the UK.
"Some people might tolerate this if their public services were getting better – but the truth is that, while we pay more, standards in education are getting worse and our GP service is in crisis.”
“Worryingly, all this is ahead of next year when the SNP is threatening to further increase income tax, penalising anyone earning more than £24,000. The danger here is that we end up deterring investment from Scotland and slashing economic growth.”
Ms Sturgeon unveiled a report earlier this month containing four proposals for tax rises that will form the basis of Budget discussions between her minority government and the other opposition parties.
All the scenarios suggested increasing the 40p higher rate and 45p top rate of income tax in April next year, with three of them also backing a penny rise in the 20p basic rate and a 50p top rate. They argued for the creation of up to six income tax bands, compared to the current three.
The NAO said the Scottish Government will receive £11.9 billion in 2017/18 from income tax in the current financial year, including £108 million from freezing the higher rate threshold at a lower salary than England.
Under a transition deal agreed with the Treasury, the Scottish Government's budget will protected if revenues fall short of expectations. However, from 2020/21 the size of Scottish ministers' spending pot for public services will be directly linked to the amount of income tax generated.
The NAO found biggest challenge facing HMRC is maintaining accurate address records of the 2.6 million Scottish taxpayers as neither they nor their employers are legally required to provide changes of address.
Around 80,000 people in the UK move into or out of Scotland each year. Although the taxman has conducted an online marketing campaign to raise awareness about the need for an up-to-date address, it is not known whether this has had any impact.
Moira Kerr, chair of the Chartered Institute of Taxation's Scottish technical committee, said HMRC must maintain reliable data so people pay the right tax and will have an "important enforcement role to play."
"For example, some self-employed taxpayers may choose to incorporate their business, shifting their liabilities from Scottish income tax to UK-wide corporation and dividend tax," she said.
A Scottish Government spokesman said: “Our recent discussion paper on income tax estimated that there will be around 366,000 higher and additional rate taxpayers in Scotland next year – a figure in line with HMRC estimates.
“Taxpayers here already get the best deal in the UK, with a range of services and benefits which are not available elsewhere."