Businesses in a town centre plagued by empty units are blaming their “silly” business rates, which they have said are a fraction of those paid by major chains such as M&S.

Cynthia Binks, who owns an independent wool shop on the main street in Aberystwyth, Ceredigion, is among those calling for business rates to be re-evaluated.

Her base business rate per square metre is £525 for the front part of the shop, whereas for M&S – a much larger store, but on the outskirts of the town – it is £55.

The Valuation Office Agency (VOA) said it valued properties in line with legislation set by the Welsh government, which added it had increased its financial support with rates, to address pressures on businesses.

Ms Binks accepted M&S had done nothing wrong, but added: “Why should I be paying, as a small business, so much more?

“They’re a big multinational company. They turn over far more than what I turn over. So why am I penalised?”

Berith Lochery, who owns a gift shop in the middle of Aberystwyth, is also in favour of re-evaluation of rates.

“It’s always been a topic of complaint for as long as I’ve been trading,” she said.

“But nothing’s happened, and as a result, Aberystwyth has suffered.

“I do what I do because I love it, [but] obviously I need to make a living. And I’ve got staff that depend on me, so there’s a big responsibility.”

Business rates are a tax on non-domestic properties including shops, pubs and offices.

Local councils collect them and send them to the Welsh government which distributes more than £1bn a year back to local authorities to fund services.

Business rates are calculated by the VOA, using a rental method to value high street businesses.

Information on rents is gathered and analysed and the VOA works out a price for the rates per square metre of the premises, which then is added up to create their annual bill.

Zone A of the premises is the most expensive – it is the area nearest the shop window and up to a depth of 6.1 metres from the front.

Ms Binks and Ms Lochery both receive a reduction on their rates, which is available to retail and hospitality businesses.

But it is not available to Kerry Ferguson, director of a website design firm, which is a professional services company.

Her business rates are £750 a month – with her base rate being slightly lower due to her premises not being on the high street – which she felt was “quite high”.

“We knew about them when we took on the office. But I do often think, how I could invest that money into the business, going towards paying for an extra member of staff, and that would build into the local economy here,” she said.

Maldwyn Pryse, mayor of Aberystwyth, compared the base business rates in the town to other places in Wales and found the value of Zone A rates for retail properties in the middle of Aberystwyth was £525 per square metre, compared with £460 on St Mary Street, Cardiff, and £180 on the Kingsway in Swansea.

Mr Pryse said: “There’s obvious unfairness here. When we look at the figures, when we compare the population size, when we compare the footfall, there’s something inherently wrong in the way it’s calculated. We need to get to the bottom of what’s wrong, because it is penalising our businesses.”

He called for a meeting with the chief executive of the VOA, adding “complete transparency” was needed.

Becky Barratt, who co-owns a design company and is chairwoman of Aberystwyth Business Club, said she accepted that rents were high in Aberystwyth, especially on the high street, but added empty shops could be occupied if the rates were lower.

“It just becomes prohibitively expensive because the turnover isn’t what it was twenty to thirty years ago on the high street,” she said.

“We’ve got so many amazing independent retailers in Aberystwyth, we could fill our high street twice over with them all if the rents and the rates were just more realistic for the current climate.”

A VOA spokesperson said: “We value properties in line with legislation set by the Welsh government. When determining the rateable value of properties, we gather a range of evidence about the local property market, but primarily look at rental values.

“There are many reasons why these differ from location to location, and this may not solely be based on population size.”

The Welsh government added: “We recognise the pressures faced by businesses in Wales and are providing more than £130m of additional non-domestic rates support this year. We have also announced a further £85m of additional support for next year.

“This comes on top of our permanent reliefs for businesses worth £250m annually.”