THE boss of one of Scotland's biggest food companies has issued a warning about the impact of raising income in tax Scotland when new powers come into force.

Peter Ward, the chief executive of Young's Seafood, said raising income tax would inflict "serious" damage on the business by encouraging senior staff to leave the country.

He also warned the red-tape involved in distinguishing Scottish from UK income tax payers would result in additional costs.

In a submission to Holyrood's devolution committee, he called for guidance on the issue, telling MSPs some of his workers split their time between Scotland and England.

Young's, part of the Findus Group, employs 2000 permanent staff in Annan, Livingston, Fraserburgh and Spey Valley and as further 1000 temporary workers during seasonal peaks.

The Scottish Government will set a Scottish Rate of Income Tax (SRIT) for the first time next year, taking effect at the start of the financial year in April.

Holyrood will be responsible for raising about half the tax levied in Scotland initially.

However, under the Scotland Bill now before the Commons, it will take almost complete control over income tax from 2017 or 2018.

Finance Secretary John Swinney is not expected to deviate from UK rates when he sets his budget for next financial year but First Minister Nicola Sturgeon has hinted she wants to raise taxes on the wealthy when the full powers become available.

Mr Ward said the SRIT threatened to increase costs "at a time when economic recovery is still underway and when we find ourselves operating in a very challenging and competitive market place".

In a separate submission to the committee, the Scottish Building Federation warned tax rises would encourage black market cash-in-hand transactions.

The Scottish Government confirmed it would set the SRIT as part of its budget process for 2016/17.