Finance secretary, Derek Mackay, announced a new tax band of 21p for those earning more than £24,000. A new starting rate of 19% will apply for those earning between £11,850 and £13,850.

There will also be a higher rate of 41% applied to incomes between £44,273 and £150,000 and a 46% tax rate for all income over £150,000.

Mackay said no one earning less than £33,000 in Scotland would pay more tax. The average salary in Scotland is currently £23,150 according to the Scottish Parliament Information Centre.

The Scottish government was given power to set income tax rates and bands last year.

The move is designed to combat accusations that the SNP is merely following austerity imposed from Westminster. Mackay is expected to use the money to lift the public sector pay cap, promising extra money for the NHS, childcare, education and the police.