Rishi Sunak on Monday heavily criticised a new higher tax band expected to be announced by the Scottish National Party amid a warning that it could see more Scots head to London.
Scotland's Deputy First Minister Shona Robison will announce her Government's tax and spending plans for the next year on Tuesday, dealing with a potential £1.5billion black hole in the country's finances.
According to reports in recent weeks, First Minister Humza Yousaf is set to create a new tax bracket for higher earners in a bid to bring in more revenue.
He said he would consider such a move, suggested by Scottish trade unions, while he was running for SNP leadership earlier this year.
But business groups and now the Prime Minister have warned against increasing the tax burden on Scots and further diverging from the rest of the UK.
On a visit to RAF Lossiemouth in Moray, the Prime Minister said: "The first thing I'd say is the UK Government has provided a record amountof funding to the Scottish Government through the Barnett formula, so they're ultimately responsible for the finances here in Scotland.
"But I can tell you what we're doing in the UK is controlling spending and cutting people's taxes and that's going to kick in for everyone in Scotland and acrossthe UK, a reduction in the rate of national insurance from 12 per cent to 10 per cent from January.
"That will save a typical person in work around £450 - it's a significant tax cut.
"So that's what the UK Government is doing to help Scottish families with the cost of living, which we know is a priority for them.
"But ultimately, it's the Scottish Government that are responsible for their own finances - it's already the highest taxed part of the UK and obviously it wouldbe very disappointing to see that tax burden continue to rise in Scotland."
Shadow Scottish Secretary Ian Murray has warned the new higher band could fuel a "brain drain" from Scotland.
He told The Standard last week: “The SNP already have Scots paying the highest tax rates anywhere in the UK, and their failure to grow Scotland’s economy mean they’re looking to increase it even more.
“They need to grow the tax base not milk it with the consequence of more brain drain to London.”
Scottish income tax is more complex than south of the border and means that there is a:
* Personal Allowance which goes up to £12,570 before paying the levy
* Starter rate of 19 per cent for earnings between £12,571 to £14,732
* Basic rate of 20 per cent for income of £14,733 to £25,688
* Intermediate rate of 21 per cent for those on between £25,689 to £43,662
* Higher rate of 42 per cent for earnings between £43,663 to £125,140
* Top rate of 47 per cent for incomes over £125,140
The precise details of Mr Yousaf‘s plan are not known but he is believed to have shown interest in a proposal from Scottish trade unions for a 44 per cent income tax band on earnings between £75,000 and the upper rate threshold of £125,140.Research suggested this could raise £200 million a year.
A proposal by the IPPR Scotland think tank, for a 45 per cent rate on earnings above £58,285 and below £125,140, was estimated to raise £257 million.
Business chiefs warned the reform could hit jobs.
In a statement on Sunday, Ms Robison, who also serves as the country's Finance Secretary, hit out at the level of funding available to Scotland, but said the budget unveiled on Tuesday would seek to protect people and public services.
"In the face of a deeply challenging financial situation, this budget will reaffirm our social contract with the people of Scotland," she said.
"The autumn statement was devastating for Scottish finances. The Institute for Fiscal Studies has acknowledged that it will lead to planned real-terms cuts inpublic service spending."
But she added: "We refuse to follow UK Government spending decisions - indeed, we are doing all we can to mitigate them.
"We are proud that Scotland has a social contract which ensures people are protected by a safety net should they fall on hard times.
"This contract underpins this budget, with targeted funding to protect people and public services."
