The Scottish government has been accused of “stoking up division” by calling on the Treasury to make its £500 bonus to healthcare workers tax-free.
First Minister Nicola Sturgeon used her party’s SNP conference speech to announce the “thank you” payment.
And she urged Boris Johnson to use UK government powers to wave income taxes.
However, the Scottish Conservatives said making such a plea was designed to “stoke up division”
The Treasury said it was down to ministers at Holyrood “to gross up the payment if it wishes.”
The leader of the Tories in Scotland, Douglas Ross, called on Ms Sturgeon to top-up the payment immediately “and stop playing politics with the pandemic”.
He suggested that by upping the amount to £625 it would give full time health workers the £500.
The payment, which is due to be paid before Christmas, has also been criticised by independent research unit, the Fraser of Allander economic institute, which said exempting any bonuses was “not widely regarded as a good use of tax policy regardless of which government has the powers to do it”.
A blog by David Eiser and Graeme Roy said: “There’s a reason bonuses are taxed; if they weren’t, everyone would want paid in bonuses rather than regular pay. Making an exception to the rule once opens the possibility of endless future lobbying for tax-exempt bonuses – which is not something any government should be keen to encourage.”
They added: “It is perfectly legitimate – and indeed desirable – to want to recognise and reward NHS/care workers for their efforts in recent months. But if policymakers want those employees to benefit by £500 after tax, the solution is to pay a higher gross bonus. There is little reason for these rewards to be exempt from the existing social contract, or for them to require administrative and legislative hurdles to implement.”
SNP MP Alyn Smith said the Scottish government would “work within the limits of devolution” if the Treasury did not have a rethink.
But he called on the prime minister and chancellor to “see some sense” on the matter.
He told the BBC’s Politics Live programme: “The NHS staff have been having a dreadful time and we have all been relying on them this year. We think a £500 payment is entirely appropriate.
“Other people have been let down and need looked after too. But we think NHS workers are in a special category and to tax that is just a poor show.
“Clapping carers and clapping the NHS is all very nice but we think they fully deserve some money and the UK government shouldn’t tax these payments.”
Mr Smith said he opposed calls for the Scottish government to simply top-up the payment to workers then claim the tax back from the Treasury.
He said: “We don’t want to be paying tax to the UK government when the UK government could just forego it.”
However, Conservative MP Mr Ross said: “Why is it that the SNP feel the need to take a £500 NHS ‘thank you’ payment and stoke up division with such a clearly political move, all to provoke a fight with the UK government?
“The SNP are pushing for indyref2 in the middle of a pandemic and creating a political bunfight out of thin air.”
Scottish Liberal Democrat leader Willie Rennie also criticised the SNP’s stance and said it was “disappointing that workers had to wait months for this payment”.
“SNP ministers should show more respect to NHS and care workers,” Mr Rennie said.
“They should get them the money they believe should be paid and not use them as a battering ram on the constitution.”