Scotland’s tax raid on top earners may have cost Holyrood money, new analysis from the Institute for Fiscal Studies suggests.

The decision to squeeze high-income earners rather than boost the country’s coffers appears to have backfired, the leading think tank said.

It was based on Some of Scotland’s best-paid workers have left the country Others are looking for loopholes to avoid paying a higher tax bill, the IFS said.

It comes after Scotland’s former SNP leader Nicola Sturgeon raised taxes on high earners more aggressively than Westminster in recent years. enjoyed greater powers in income tax Awarded in 2017-18.

Economist David Phillips of the IFS said: “Increases in the top tax rate are unlikely to deliver much of a boost; evidence from Scotland’s first reforms in 2018-19 suggests they could even reduce revenue.”

The analysis will serve as a warning to the Scottish Government ahead of next month’s budget, according to the think tank.

Mr Phillips said: “The evidence currently available suggests that the Scottish Government should at least halt plans for further increases in Scotland’s tax rates on high incomes if the aim is to raise revenue.”

according to Current tax rates in ScotlandSomeone earning £125,000 would pay £5,221 more even if they were to live south of the border.

This difference is £2,400 more than two years ago.

Mr Phillips said: “The size of the difference in income tax bills for high earners between Scotland and the rest of the UK has increased significantly over the last two years.”

Although HMRC has not yet published data on how workers have responded to tax increases in recent years, the relatively small increases in 2018-19 appear to have already been counterproductive.

The Scottish government that year increased tax on income over £43,430 from 40 per cent to 41 per cent, while increasing tax on earnings over £150,000 from 45 per cent to 46 per cent.

The change caused a net 60 people earning more than £500,000 to leave, costing Scotland £38 million in lost income, according to HMRC.

Mr Phillips said: ‘Research from Scotland, the UK and other countries points to such differences affecting taxpayers’ behavior – how much they earn, how much they emigrate and whether they evade or evade tax.

“These responses are most significant for the highest-income individuals, who, although small in number, make a large contribution to overall tax revenue.”

High earners who remained in Scotland stopped leaving the labor market but some instead reduced their working hours or found ways to reduce their tax liability.

Mr Phillips said these two factors – people leaving or avoiding tax – would “imply that the increase in the top tax rate in 2018-19 reduced rather than increased revenue”.