EIGHT out of 10 small business owners in Scotland oppose tax hikes, a new survey suggests today, as Derek Mackay, the Scottish Finance Secretary, prepares this week to unveil his Budget for next year.

It is widely expected that on Thursday his proposals will increase income tax for middle and high earners and widen the so-called “tax gap” with the rest of the UK after Nicola Sturgeon, the First Minister, said recently that the time was right to consider "modest" increases to fund public services.

According to a poll of 315 businesses in Scotland by the Federation of Small Businesses almost three fifths, 58.3 per cent, of those polled by FSB said they wanted income tax rates to stay the same while 20.7 per cent backed a cut. Taken together, this means 79 per cent do not want to see a tax rise while 21 per cent supported one.

Around two thirds, 65 per cent, agreed that an increase in income tax would be detrimental to Scotland’s economy compared to 18 per cent, who thought it would be a boost and 17 per cent, who suggested it would have no impact.

Andy Wilcox, the FSB’s Scottish policy convenor, said: "A clear majority of those that run their own business in Scotland don't want the Finance Secretary to increase income tax rates.

"Those asked warned of the impact on the wider economy and, little wonder, with pressure on household incomes and uncertainties about the impact of Brexit."

Ms Sturgeon has set out four options indicating that those earning more than £31,000 could be in line to pay more.

The SNP Government's four alternative approaches include having anything up to six tax bands, while three out of the four feature a 50p additional rate and incremental changes to the basic and higher rates.

Three of the four approaches would see people earning more than £24,000 pay more income tax and all four would increase tax for those earning more than £44,290.

The various proposals, some of which would see additional tax bands created, were predicted to raise between £80 million and £290m, depending on which one was ultimately adopted.

The FSB survey found that just under half of business owners preferred the proposal with the largest number of bands and rates, around a third wanted rates hiked for high earners and one in 10 preferred a rise for mid and high earners.

Just seven per cent of small businesses said they would prefer the option where a small number of additional rates were added.

Of those surveyed 64.8 per cent were basic rate taxpayers earning between £11,501 and £43,000, just over a fifth, 22.5 per cent, earned between £43,001 to £150,000 and 1.6 per cent fell into the additional rate bracket, earning more than £150,000 per year.

"This data scotches the myth that business owners are all high earners," declared Mr Wilcox. "Further, when forced to choose between ministers' palette of tax options, the largest share of business owners chose what could be regarded as the more progressive option," he added.

The minority SNP government will need to win the support of either the Liberal Democrats or the Greens to get its budget through the Scottish Parliament.

Patrick Harvie, the Green’s convenor, said it was "clear there's a growing consensus for a more progressive system of income tax".

He added: "Greens have led on this issue, consistently pushing the idea of a greater range of rates and bands and protection for those on lower incomes."

Mr Mackay has sought to reassure businesses by saying economic growth and innovation will be at the heart of his Budget while a Scottish Government spokesman stressed how the aim was to create a “balanced package of tax and spending proposals”.