Scots are choosing to live in England and commute over the Border to avoid ‘punitive’ SNP taxes, it has been claimed.

The rise of cross-Border commuters was triggered by Nationalist reforms which have seen the country become the most heavily taxed part of the UK.

Rathbones, one of the UK’s leading wealth and asset management groups, said there was a ‘clear tension between Scotland’s devolved income tax regime and wider UK growth ambitions’.

Experts say the punishing levies have a detrimental impact on businesses, with firms also being forced to offer increased pay and benefits for senior executives to mitigate the Holyrood tax rises.

Scottish Tory finance spokesman Craig Hoy said: ‘This should be a wake-up call for John Swinney.

'The SNP have created a tax system so punitive and so needlessly complicated that talented professionals are deciding they’d rather live in England than Scotland. 

'The SNP’s obsession with making Scotland the highest-taxed part of the UK is choking growth, undermining competitiveness and holding our economy back.’

Rathbones said former Scottish Labour leader Anas Sarwar’s appointment in Andy Burnham’s new UK Government ‘creates an opportunity to put investment and business in Scotland higher up the national agenda’.

Gordon Lawrie, head of the wealth manager’s Edinburgh office, said: ‘Our advisers see individuals who work in Edinburgh but choose, for tax reasons, to live south of the Border and commute – this is not good for Scotland.’

He said: ‘There is a clear tension between Scotland’s devolved income tax regime and wider UK growth ambitions.

‘The current system is significantly more complex than elsewhere in the UK and places a materially higher burden on many professionals, business owners and senior executives.’

Anyone in Scotland earning above £30,300 pays more tax than they would in England.

There, workers pay 20 per cent on earnings above £12,571, rising to 40 per cent above £50,271 and a 45 per cent additional rate above £125,140.

But the SNP’s convoluted system sees a 19 per cent starter rate applied on earnings above the tax-free allowance up to £15,397, then a 20 per cent basic rate up to £27,491, a 21 per cent intermediate rate up to £43,662, a 42 per cent higher rate to £75,000, a 45 per cent advanced rate up to £125,140 and a 48 per cent top rate above £125,140.

Rathbones said this ‘complexity and divergence’ risks becoming a barrier when employers are trying to recruit or persuade people to relocate.

The new administration looking to drive growth across the UK should champion policies that strengthen competitiveness, encourage investment and support the attraction and retention of talent, Rathbones said.

Adam Drummond, head of Rathbones’ Glasgow office, said: ‘Ensuring Scotland remains an attractive place to live, work and build a business should be central to the UK’s growth agenda.

‘A simpler, more competitive system would help Scotland benefit fully from the talent and investment it needs.’

Sandy Begbie, chief executive of Scottish Financial Enterprise, said the differing regimes were ‘driving behaviour change’.

He said: ‘One law firm, for example, has several partners who work three days a week in Scotland but continue to live across the Border.’

The Scottish Government said: ‘Since the introduction of Scottish Income Tax in 2017-18, HMRC has confirmed that more people with taxable income have come to Scotland than have left.’