Scotland will receive new powers to raise and lower income tax by April 2017.

Ministers reached an 11th-hour agreement over the fiscal framework for the Scotland Bill on Tuesday after months of talks.

Deputy first minister John Swinney told Holyrood's finance committee that full income tax powers would be in place by April 2017.

He described claims by Scottish secretary David Mundell that some new powers could be devolved to Holyrood before 2017 as a "leap of imagination".

But Mr Mundell told Holyrood's devolution committee there would be "no impediment" to the early transfer of some powers subject to the passing of the Scotland Bill.

'Get on and govern'

Prime Minister David Cameron described the agreement as an "excellent deal for Scotland".

On Wednesday, he told parliament: "This is an excellent deal for Scotland but also an excellent deal for the United Kingdom; for those of us who want to keep the United Kingdom together what we've just demonstrated is that you can have full-on devolution inside the United Kingdom.

"Now we're going to move to a situation where the Scottish Government and the Scottish Parliament will have to start talking about policies and decisions rather than processes.

"But I'm happy that the negotiations went as they did and I'm happy that Lord Smith, who is responsible for so much of this work, put out a statement saying this delivers [the Smith Commission report] in full.

"So no more grievance, no more fussing about process. No more arguing about the arrangements. Now is the time to get on and govern."

The timescale for the transfer of powers over welfare remains to be agreed by the two governments but Mr Mundell said he envisages a number of new powers being in place "almost immediately after the Scottish Parliament elections".

"One of the other tax powers for example, air passenger duty, can be transferred at the point that the Scottish Government has its model ready for that transfer," he said.

"If the arrangements are available shortly after the Scottish Parliament election we would be able to transfer them.

"In relation to the wider powers and the wider tax, we place no impediment in relation to the transfer of those powers."

Analysis

The latest budget will be the first with a Scottish rate of income tax and the last with only partial power over income tax.

STV Holyrood editor Colin Mackay said the timescale for devolution of powers in areas like housing benefits and child tax credits could take longer to work out.

He explained: "Some details of the fiscal framework deal are starting to emerge. Deputy first minister John Swinney told Holyrood’s finance committee this morning that full income tax powers would be in place by April 2017.

"At the moment, Labour and the Lib Dems calls for a penny on income tax would have to go on the basic rate, affecting every income tax payer.

"Next year the finance secretary, whoever that might be after May’s election, can vary any and every tax band, which means the top rate of income tax in Scotland could be higher than in the rest of the UK targeting tax rises on the rich.

"Borrowing powers will also be in place next year with a £3bn limit on capital borrowing and annual borrowing of up to £450m.

"Resource borrowing for economic shocks and tax volatility will be limited to £600m per year and a total limit of £1.75bn.

"John Swinney says he has agreed with the Treasury to the transfer of air passenger duty by April 2018, although Scottish secretary David Mundell claimed on the radio this morning that could be done any time.

"VAT will be assigned by 2019-20. Welfare powers look like taking a while to unravel and work out. Scotland will get powers over disability living allowance and carers allowance and top-up powers over housing benefit, working tax credit, child tax credit and income support but Mr Swinney said there is no fixed timetable for their transfer because the system has to be in place to make sure they are paid efficiently and on time.

"On that he admitted that he had originally asked for £400m set up costs for that new Welfare system but compromised on £200m and £66m a year for running costs."