THE heavy toll of soaring business rates on companies across Scotland has the potential to become the “poll tax moment” for the SNP, a veteran nightclub boss has warned.

Licensed trade veteran Donald MacLeod, whose company Hold Fast Entertainment owns The Garage in Glasgow city centre, said the Scottish Government could pay a heavy political price if it does not step in to support the industry. Despite being an avowed supporter of Scottish independence, Mr MacLeod fears the SNP’s pre-occupation with holding a second referendum could come back to haunt it.

He said: “Talk about Brexit uncertainty? This is a Government that is not taking a lead on this. They are washing their hands [of it]. I’m very, very angry at this.

Read more: Licensed trade to fight 'new Poll Tax' following fears hike will shut Scots businesses

“The hospitality sector, the biggest employer outside of the public sector in Scotland, is getting hammered with these rates increases, unfairly so. It is not just good enough.”

He added: “I’m a Nat, I’ve always been an independence man and an SNP supporter. Only one half of that is true at the moment. I’m very worried that my party is not showing enough concern to this rates issue, which is damaging business. They are ignoring the issues, they are not dealing with it. That is not the mark of a true and responsible government.”

Fears are growing the latest revaluation of non-domestic properties will lead to mass business closures across the Scottish hospitality sector. With some outlets having been told their rates bills will increase as much as four-fold, business owners facing having to stump up thousands of pounds per year in outgoings at a time when takings are already under severe pressure.

The new rateable values will come into effect on April 1, based on the 2015 valuation of non-domestic properties. But large parts of the licensed trade have yet to see sales recover from the dramatic downturn sparked by the reduction in the legal drink-drive limit in 2014.

Read more: Paul Waterson - A punitive tax on the trade which cannot be justified

Sales are expected to come under further pressure because of inflation, which has risen steadily since the collapse in sterling following the Brexit vote. Mr MacLeod declared there is potential for the business rates controversy to become the “poll tax moment” for the SNP if it fails to stop hundreds of outlets going to the wall.

Trade lobby groups say the hike in business rates will prove to be the final straw for many outlets, amid fears the cost burden will lead to more closures than the smoking ban in 2006.

Pubs alone are currently estimated to be closing at a rate of three per week – or around 150 per year – and there are grave expectations numbers will rise. Industry figures say some business owners simply do not know where they will be able to generate the extra cash needed to meet the costs.

Mr MacLeod, who has seen the rates bill for The Garage soar by 97 per cent to £100,000 per year, said the increased bills are being piled on top of the heavy investment operators have had to make in staff training and raising standards to meet changes in licensing regulations in the past decade, with the sector still reeling from the sales impact brought by the reduced drink-drive limit.

“Who has been battered the most by costs, training and the smoking ban?” he said. “The licensed trade. Masses of places are shutting and they bring this on us – it is an iron bar that is breaking the trade.”

Read more: Herald View - Rates rise puts so many jobs at risk

Rates assessors arrive at bills by establishing the rateable value of a commercial property, which reflects a “fair maintainable rent” the property can attract. The 2017 valuation is based on rental values achieved in April, 2015.

But the hospitality trade claims it is being hit disproportionately by the revaluation because assessors take licensed premises’ “highest achievable turnover” into account. This differs from other types of commercial property, such as retailers, which are largely rated on square footage.

Paul Waterson, chief executive of the Scottish Licensed Trade Association, says this explains why rates bills for relatively small pubs have soared while those for giant supermarkets have fallen.

Confirming licensed trade operators are bound by law to provide assessors with sales data, he condemned claims by the assessors that pubs’ turnover is not taken into account in setting bills.

“To say that they don’t use turnover is completely disingenuous,” Mr Waterson said. “We are the only ones rated this way and it is completely unfair.

“It’s a disincentive to invest and it penalises success. If you improve your business and you increase your turnover from £250,000 to £500,000 you are going to get slaughtered on rates. Why are we continuing with a system that penalises entrepreneurship?”

Read more: Donald Macleod - Holyrood has buried its head in the sand over rates

Dennis Batts, property consultant to pub group Caledonian Heritable, said it would be more appropriate for licensed outlets to be rated on profits, not turnover. He said: “At the end of the day, it is out of profits that taxes can be paid, not just out of turnover. By focusing entirely on turnover there is a feeling that this misses the point.

“I don’t think there is an issue with it being a revenue-based system, rather than a floor area. You could double the size of a pub and you might not make it more profitable. The feeling really is that while the assessors are missing the point, it really is not about turnover, it’s about profit.”

Business owners unhappy with their latest bills, which are due to arrive next month, have the option to appeal. But there is deep disquiet in the industry over the efficiency of the process.Trade figures complain business owners have no choice but to pay the higher bill while the appeal process takes place, which in some cases could mean years. It is understood more than 8,000 licensed premises, out of a total of 226,000, are still awaiting on the results of appeals made on the 2010 valuation.

Now there are concerns the process could grind to a halt, with hundreds of business owners expected to lodge appeals against the new valuations.

Graeme Arnott, director of Caledonian Heritable, said: “We’ve still got a handful that are outstanding after five years. It’s two and a half years minimum to get the stuff resolved, because everybody and their granny are going to appeal, because they all feel it is unfair. And if they don’t they’d be foolish.”

Mr MacLeod added: “They still want money while you appeal. If we could get organised there could be mass non-payment. I’m usually against direct action… but everybody is against it [rates rise].”