As a result, from April next year, Holyrood will control income tax rates and bands thresholds.

From 6 April 2017, Holyrood will have the power to set income tax rates (currently 20%, 40% and 45%) and set income tax thresholds (currently £11,000, £42,700 and £150,000).

It will be up to the Scottish Parliament to decide whether or not to keep rates the same as in the rest of the UK. However, it will not be able to change the personal allowance.

The move, on 30 November which is the feast day of Scotland’s patron saint, comes two years on from the publication of the Smith Commission’s report. This recommended which powers should transfer to Holyrood from Westminster, and the Scotland Act 2016 took forward the report’s recommendation in full.

David Mundell, Scottish secretary, said: ‘With these landmark powers over income tax, the Scottish Parliament will become one of the most powerful devolved parliaments in the world.

‘The Scottish government will now have unprecedented power to shape the economy of Scotland. Crucially, for the first time, it will not only have to account to the people of Scotland for the money it spends, but also for the money it plans to raise.’

Derek Mackay, Scotland’s finance secretary, said: ‘We welcome these legislative steps which will increase the Scottish Parliament’s powers over income tax from next year. The new powers will allow us to design an approach to taxation which will suit Scotland’s needs, balancing the need to invest with the recognition that many households are facing difficult economic challenges.

‘As we set out earlier this year, our income tax proposals for 2017/18 will aim to protect lower income taxpayers and generate extra revenue for us to invest in public services.

‘We will set out further details of our proposals for income tax in next month’s draft budget.’