SCOTLAND’S income tax regime could lead high earners to quit the country, cut their hours or incorporate as businesses to save money, a leading tax body has warned.

The Chartered Institute of Taxation (CIOT) said higher bills north of the border could see to a drop in cash from the 15 per cent of people who are relied upon for 60 per cent of all income tax revenue.

The warning came ahead of MSPs passing the budget-related legislation which will widen the tax gap between England and Scotland for higher rate taxpayers to £1500 a year.

The Scottish Rate Resolution will freeze the threshold at £43,430 in Scotland while it rises to £50,000 in England and Wales from April, giving taxpayers there an effective tax cut.

The Scottish higher rate is also set at 41p in the pound compared to 40p south of the border.

The SNP is expected to be the only party backing the measure, which should generate an extra £68m, when it is put to a vote at Holyrood tonight.

Their budget allies the Greens will abstain because they feel Finance Secretary Derek Mackay is not raising enough tax for public services.

Nicola Sturgeon has been criticised for missing the vote in order to speak to deputies of the National Assembly in Paris about Brexit.

READ MORE: Nicola Sturgeon accused of 'running away' from tax vote

Alexander Garden, chair of the CIOT’s Scottish Technical Committee, said: “As the tax bills for those paying the higher and top rates of tax increase relative to the rest of the UK, there are concerns that some of those taxpayers (being less than 15 per cent of all Scottish taxpayers, but contributing almost 60 percent of all devolved income tax revenue) will seek to take steps to legitimately limit their tax liabilities.

“These taxpayers may choose to limit the number of hours that they work to avoid being pushed into higher rates of tax.

“They may also choose to increase the amount of pension contributions that they make, effectively increasing the thresholds above which they pay higher rates of tax.

“For the self-employed, the opportunity to pay lower rates of corporation tax by incorporating their businesses, as opposed to paying income tax, may also become a more attractive option. Higher earners, or those with greater mobility, may even choose to relocate away from Scotland.”

Mr Garden also said the SNP’s own policies would only benefit low-paid workers by a maximum of £9.93 in 2019/20, through raising the starter and basic rates of income tax.

with the Treasury’s raising of the tax-free personal allowance, having a far more profound effect by saving people up to £130 a year.

Although taxpayers might welcome the boost, he said the imbalance between the impact of the decisions at Holyrood and Westminster posed a risk to the Scottish tax base.

He added: “The UK Government’s decision to increase the tax free personal allowance – an area that Holyrood has no control over – has a far greater impact.

“This also has the effect of reducing the total number of Scottish taxpayers by taking them out of income tax altogether.

“While this may be perceived as good for those individuals, it adds further risk and volatility to the Scottish tax regime, by reducing Scotland’s ability to control how much tax revenue it directly raises and subsequently forecasting the amounts of revenue that are raised.”

READ MORE: MSPs to back tax hike for Scotland's highest earners

Speaking ahead of today’s vote, Mr Mackay said: “Our decisions have resulted in a more progressive tax system, protecting those lower and middle income taxpayers, while raising additional revenue to invest in our public services and the Scottish economy. Our policies on tax make Scotland an attractive place to live, work and invest.

“The Scottish Budget proposes an additional £2bn of investment. It provides an increase of almost £730m for health and care services, more than £180m to raise attainment in our schools and gives a vital boost to our economy through a £5bn infrastructure programme.”

The final vote on the Scottish Budget 2019/20 will be held on Thursday.