SCOTTISH taxpayers have handed over £900million in income tax for a net benefit of just £170m under SNP tax changes, with the better-off worst hit, Holyrood’s independent researchers have found.

The parliament’s information centre said Scots paid £900m more in the last three years than they would have if the Scottish Government had simply mirrored UK rates.

However the net benefit was £170m, as the rest was offset by changes to Holyrood’s block grant from London because of differences in the Scottish economy.

The research said the £730m gap from 2017/18 to 2019/20 reflected the “risks inherent in tax devolution”.

The Tories said hardworking Scots were being punished for SNP "incompetence".

The research also said Scotland's income tax system, which has five bands to the UK’s three, and different rates and thresholds, had delivered almost no tangible benefit to the low paid.

In the current year, those earning less than £27,000 will see a “modest benefit” of around £20, while the poorest third of households would see a “negligible” gain of less than 0.1% of household income. 

There was a “much more significant impact on higher earners and richer households”.

The research said: “Those earning more than £50,000 per year are paying over £1,500 more per year in income tax than they would be in rUK [the rest of the UK]. 

“The richest 10% of households have £1,800 less per year than they would if they were paying income tax according to the rUK policy.”

The Scottish Government argues this is one of the key benefits of having an income tax system which is different to the one south of the border - shifting more of the burden onto the well-paid to make income tax fairer.

The formula for deciding how much of the tax raised is offset by changes to the block grant is called the fiscal framework, and is currently beign reviewed.

Under the fiscal framework, the block grant sent to Scotland every year is adjusted based on tax receipts.

It means that if the Scottish Government keeps its tax policy the same as the rest of the UK and tax receipts grow at the same rate, then deductions from the block grant would mirror the amount raised from taxpayers.

But because the Scottish Government decided to shift its tax policy to a more “progressive” one, a net difference of just £170m has been added to the budget.

The Scottish Parliament Information Centre research paper said: “Over the three-year period of income tax devolution for which actual tax receipts are known (2017-18 to 2019-20), the different income tax policy adopted by the Scottish Government has generated an estimated £900 million in additional revenues than would have been available if the Scottish Government had mirrored rUK income tax policy.

“That is, Scottish taxpayers have paid an estimated £900 million more in income tax than they would have if rUK income tax policy had been implemented in Scotland.

“However, the net effect on the Scottish budget over the same period is much smaller than £900 million.

“For the same period, the net benefit to the Scottish budget totals a much smaller £170 million.

“This represents the difference between the NSND [non-savings non-dividend] income tax revenues generated and the adjustments to the Scottish block grant over the same period.”

The paper added: “The Scottish Government budget has not seen the full impact of the differential tax policies due to differences in economic factors affecting the amount of tax that Scottish taxpayers have generated, such as differential wage growth, differences in the composition of the tax base and differences in the balance between taxpayers and non-taxpayers across the population.

“The gap between the £170 million budget impact and the £900 million impact on taxpayers reflects the risks inherent in tax devolution.

“Weaker growth in Scottish income tax receipts per head compared with rUK has meant that some of the revenue generated by the different income tax policy has been offset.”

Scottish Tory Finance and Economy spokeswoman Liz Smith said: “These figures confirm what has long been feared. The SNP’s punishing tax rises on hardworking Scots are delivering a bad deal for the public purse.

“Despite collecting almost a billion more through higher income tax bills, the SNP’s economic incompetence has meant that the benefits are simply not being felt in the Scottish budget.

“As we look to accelerate our economic recovery, SNP Ministers must ensure that Scotland does not lag behind compared to the rest of the United Kingdom as a result of having higher taxes in place.

"The SNP are continuing to preside over a pay more, get less culture.”

A Scottish Government spokesperson said: “As the SPICe briefing makes clear, our decisions on income tax since 2018-19 have raised additional revenue for successive Scottish budgets.

"That’s additional money that we’ve been able to invest in our NHS, schools, and tackling the climate emergency.”