An independent Scotland would require a significant cut in spending or increase in taxes, over and above that already announced by the UK government, to put long-term public finances onto a sustainable footing, according to a report by the Institute for Fiscal Studies (IFS).

IFS research indicates that the most optimistic scenario suggests the long-term 'fiscal gap' in Scotland would be 1.9% of national income, equating to some £3bn, compared to 0.8% of national income for the UK as a whole, largely because of the demands of an ageing population and a decline in revenues from the North Sea.

Closing it would require the equivalent of a 9% increase in the basic rate of income tax, an 8% increase in the standard rate of VAT, a 6% reduction in total public spending, or an 8% reduction in public service spending, the IFS calculated. This would need to come on top of the fiscal tightening already planned by the UK government through to 2017-18.

Gemma Tetlow, a programme director at the IFS and one of the report's authors, said: 'In 2011-12, higher public spending per person in Scotland was more than matched by higher revenues from activity in the North Sea. However, over the long-term, revenues from the North Sea will probably decline and official population projections suggest that the average age of the Scottish population will increase more rapidly than for the UK as a whole, putting greater upward pressure on many areas of public spending.'

In the run-up to the Scottish referendum next year, HMRC is consulting on a new series of experimental statistics it first published in October which look at how tax receipts are split between the countries of the UK.

Commenting on the data Carl Bayley, deputy chairman of ICAEW tax faculty, who is based in Scotland, said the methodology used to attribute North Sea oil revenues had the potential to make a substantial difference to Scotland's position.

'For example, using a geographic basis rather than a population-based approach adds £4.6bn, or more than 12%, to Scottish tax revenues in 2012/13. However, including North Sea oil revenues on a geographic basis also adds a much greater degree of volatility to Scottish tax revenues,' Bayley said.

Where North Sea oil revenue is excluded, Scotland's current share of UK tax revenue is broadly in line with the proportion of the UK population residing in Scotland, suggesting that, in all other respects, Scotland is performing close to the UK average.

Bayley said that 'whatever basis is used to apportion North Sea oil revenues, Scotland's tax revenue has increased at a faster rate than the UK average over the period covered'.

The report, Disaggregation of HMRC tax receipts between England, Wales, Scotland & Northern Ireland, is available HERE

HMRC is now consulting on how the statistics are being used and suggestions for how the methodologies can be improved. The consultation closes on 31 March 2014 and is available HERE