Treasury secretary David Gauke has warned that moves by the Scottish government to wrest corporation tax powers from Westminster would be 'strongly resisted'.

Gauke was speaking at an ICAS event when he said that any attempt to devolve responsibility for corporation tax to the Scottish executive would 'create confusion and complexity' for businesses operating in and around the border between the two countries.

The Scottish government is set to win powers to vary income tax as part of the Scotland Act 2012, which is due to come into force in April 2016. Gauke said he supported this development, but was opposed to plans by the governing Scottish National Party to extend those powers to cover corporation tax.

In his speech, Gauke described devolution of the power to set income tax as 'a sensible reform because it's about accountability.' However, he said he had not seen a good argument for devolution of corporation tax, and the Westminster government was 'very resistant' to the idea. He added that the situation was different in Northern Ireland, because it does not share a land border.

Some commentators have warned that allowing Scotland to vary corporation tax could lead to Holyrood setting it below English levels, effectively creating a tax shelter within the UK. This could lead to ostensibly English businesses locating just north of the border in order to benefit from the lower levy.