Nearly half of Scottish firms say a reduction in taxation would be one of the most important factors in boosting their growth, while almost a third said the same of reducing business rates.

A third of Scottish firms added that personal tax hikes make it "very or extremely challenging" to compete with England and Wales.

However, the Understanding Business survey, carried out by the Diffley Partnership for the public affairs consultancy 56° North, also revealed that 32% of firms thought the SNP was best at representing the interests of Scottish business, compared with 29% for Labour and 19% for the Conservatives.

All to play for in election year

John Penman, managing partner at 56° North, said the Scottish Government will be "pleased that they remain neck and neck" with other parties.

He added: "Tax is clearly something that remains a huge issue for Scottish businesses and they feel the current set-up restricts growth.

"These figures also show that there is still much to play for when it comes to winning business support ahead of the next couple of elections at UK and Scottish levels."

Scott Edgar, senior research manager at Diffley Partnership, said: "Businesses cite reducing taxation and business rates as key measures to drive their growth while rising operational costs and economic uncertainty are viewed as presenting barriers for their growth.

"In line with previous waves of the study, skills continue to be a major issue for businesses with a lack of skilled applicants remaining the biggest when it comes to recruitment."

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