STRUGGLING retailers have demanded tax breaks to protect thousands of jobs as businesses face up to the economic turmoil caused by the UK's decision to quit the EU.

The Scottish Retail Consortium (SRC), which represents an industry employing more than 250,000 people, accused the Scottish Government of not doing enough with devolved powers to assist firms.

It said an increase in rates for larger firms in Scotland announced only last year should be reversed and that plans for a bottle deposit scheme, aimed at reducing litter and boosting recycling, should be shelved.

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The body went further as it called for "fundamental reform" of all business rates as it warned retailers had been going through an "unprecedented period of transition" even before the EU referendum result were facing "significant challenges".

Meanwhile, the Scottish Chambers of Commerce said that inaction on business rates was "no longer an option" and that a revaluation should be overhauled to take into account the economic consequences of Brexit alongside the oil price crash.

Keith Brown, the SNP economy secretary, insisted that investing in infrastructure rather than tax cuts was the best way to protect the economy and refuted claims that his party's stance over a second independence referendum was a large factor behind uncertainty.

The row comes as statistics back up retailers' claims that Scottish businesses are disproportionately suffering, with SRC figures showing the value of retail sales north of the Border in June was down 1.4 per cent on the same month of 2015, in contrast to a 0.2 per cent year-on-year rise in the UK as a whole.

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David Lonsdale, the SRC director, also said ministers should resist the temptation to ramp up taxes on individuals as he called for a "bold and ambitious" Scottish budget, which will be published after the UK Government announces its Autumn Statement.

He said: "The SRC shares the devolved administration’s aim of making Scotland the most competitive part of the UK to do business, however that goal has yet to be achieved.

The Scottish Government should look to reduce the burdens on retailers so they are at the very least no more onerous than elsewhere in the UK.

"That means scrapping the unfair Scotland-only large business rates surcharge, working with firms to ensure they directly benefit from the Apprenticeship Levy monies, and developing a joint government and industry retail strategy to support small, medium and large retailers across the country."

He added: "The Scottish Government is rightly concerned about the potential economic impact of the Brexit vote on Scotland. However, they have the powers at hand right now to do more to encourage growth and promote productivity in Scotland."

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The calls come after Nicola Sturgeon announced a £100m 'stimulus' to speed up spending on infrastructure projects, but came under attack from some quarters after it emerged she had merely recycled the cash from last year's underspend, while others branded the package "a drop in the ocean".

Liz Cameron, Chief Executive of Scottish Chambers of Commerce, said that action was required urgently to ensure a business rates revaluation next April, due three months before a review of the tax is due to report, did not do further damage.

She added: "Rates will be revalued in less than eight months’ time but the values that will apply are based on the economy as it was in April 2015. Action is required now to prevent a damaging revaluation hitting the cost base of businesses across Scotland at a time when they can least afford it. This is a rates time bomb that must be defused now."

Mr Brown accepted that businesses were facing "huge uncertainty" but blamed "the complete failure of the Tory Government to plan for EU referendum aftermath."

He added: "The SNP Government is doing everything it can to support business in the wake of this uncertainty. Just this week we announced a new £100 million stimulus package that will keep our economy moving in the current turbulent period.

"Our Small Business Bonus Scheme has helped ease the tax burden of thousands of small retailers in high streets up and down Scotland.

"We are determined to maintain competitive business rates for the majority of ratepayers, and have commenced an external review to engage with business and explore how rates can better reflect economic conditions and support growth."