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How a business rates rethink could help fill Elgin town centre with independent traders

There are worries the current system is making local businesses think again about expansion plans.

Sarah Medcraf walking down Elgin High Street.
Moray Chamber of Commerce chief executive Sarah Mecraf on Elgin High Street. Image: Jason Hedges/DC Thomson

A revamp of the business rates system has been called for to help independent traders move to Elgin town centre and consider expansion to empty units.

Concerns have been raised about the number of large retail units being left behind by national retailers that have pulled out of the town.

The Press and Journal has spent the last two months speaking to locally owned town centre businesses to understand the biggest issues affecting firms.

And one issue that has been repeatedly raised is the size of business rates bills.

Some firms say they wish they had smaller premises to save on the expense, while others say worries about the increase in costs is putting them off expanding.

Business leaders say the current system is making firms think twice about expansion while calling for rates-free periods to support town centres.

Why Elgin businesses believe business rates are too high

Business rates are a property tax on commercial properties that are collected by councils on behalf of the Scottish Government.

The size of the bill is determined by the value of the property, which is determined by an independent assessor.

Large properties like Tesco in Elgin have to pay £737,880 per year while one shop on Commerce Street in the town centre pays £3,486 and smaller units qualify for a complete exemption.

Vic and Graham Flett outside front door of Sound and Vision.
Father and son Vic and Graham Flett run Sound and Vision together. Image: Jason Hedges/DC Thomson

Sound and Vision co-owner Vic Flett told the Press and Journal he has repeatedly appealed to have the South Street premises revalued to recalculate his £11,000 bill.

The businessman, who has traded in Elgin for more than 40 years, argues it is unfair to include storage space in the calculations, believing only shop space should be used.

Son Graham Flett, who is also a co-owner, said: “We’ve got the benefit her of a good shop space but all the storage space we have makes the rates ridiculous.

“When you look around the town you see properties filling up reasonably quickly, but it’s all the smaller properties that are under the rates threshold.”

Father and son Vic and Graham Flett both agree that if they started Sound and Vision today they would do so in a far smaller town centre unit.

Drone picture looking down on St Giles Church and Elgin High Street.
Large empty units is a concern in Elgin town centre. Image: Jason Hedges/DC Thomson

It’s a sentiment that Marius Puscas, owner of Planta on Batchen Street, agrees with.

He said: “I’m probably one of the few businesses on the street that pays business rates.

“If it was possible, I would definitely have wanted a smaller unit when we opened.”

The Elgin shop that wants to expand but can’t

Fears about taking on bigger properties is also leading to some businesses in Elgin backing away from expansion plans.

Peter Ralston, owner of The Pop Shop, has built a community around his town centre business since opening nine years ago.

Today he wishes he could move from Thunderton Place to a more prominent spot on the High Street – but fears he can’t afford it.

Peter Ralston behind the till at The Pop Shop surrounded by merchandise.
Peter Ralston went into business himself after becoming fed up working for others. Image: Jason Hedges/DC Thomson

His current premises is small enough to qualify for a business rates exemption.

Meanwhile, one unit that was empty until recently on the High Street comes with a £6,575 annual business rates bill – an extra expense Mr Ralston says is unaffordable.

He said: “Unfortunately if I move up to the next size of property then I would have to start paying business rates, which isn’t affordable with the income I have.

“Being on the High Street should be what everyone wants, it has more footfall which usually means people notice your business more.

“I would prefer to be on the High Street, but it’s just out of range at the moment with the business rates.”

The shop that says going big is worth it

However, one Elgin retailer says taking on the challenge of a big unit with the extra business rates can be worth the risk.

Nelly Bo’s opened on the High Street in 2022 after owner Kerry Dean sought out a large property.

She said: “We looked at two other shops on the High Street and they just weren’t big enough for us. We would have already outgrown those other units by now.

Kerry Dean sitting on bench outside Nelly Bo's on Elgin High Street.
Kerry Dean specifically wanted a big unit to open Nelly Bo’s. Image: Jason Hedges/DC Thomson

“A lot of people talk about the cost of rent and rates. We thought we could make it work and decided to do it and so far it’s working.”

She added: “People don’t need to be scared, as long as they believe in what they’re doing and think they can make it work.

“It’s not as intimidating as you might think. Yes, it’s hard work. It’s very hard work when you’ve got three kids.

“I never thought I would be doing this but I’m so glad I am.”

How rates relief could help Elgin High Street

Moray Chamber of Commerce says concerns about the affordability of business rates has been a repeated concern in Elgin and across the region for years.

They say a rethink of the way business rates are calculated is essential to support firms that provide lifelines to many while keeping town centres thriving.

Chief executive Sarah Medcraf says rates-free periods could give firms more confidence to expand before paying extra costs.

She said: “Businesses that have the ambition to grow and create jobs are taking a risk when upsizing, not only with fit-out costs, but going from paying no rates to even a couple of thousand pounds a year.

Moray Chamber of Commerce chief executive Sarah Medcraf with arms folded in Elgin town centre street.
Moray Chamber of Commerce chief executive Sarah Medcraf says more business rates support could help town centres. Image: Jason Hedges/DC Thomson

“With customer growth not likely to happen overnight, this is enough to make a business think twice on expansion.

“Noting that there are some other schemes available, such as if the property has been vacant, the rates system as a whole is not fit for purpose.

“The Scottish Government must support our ‘bricks and mortar’ businesses, especially in our town centres.

“We know that businesses are often able to negotiate rent free periods with landlord of vacant commercial properties, if there was similar support for rates we would find our town centres in a much different situation.”

Support available to help traders

The Scottish Government says it already provides the UK’s “most generous” rates relief for small businesses.

A spokeswoman added: “The budget also provided a number of reliefs that are unique across the UK such as the Fresh Start and Business Growth Accelerator reliefs which encourage investment in, and the reoccupation of, our high streets by providing up to 12 months relief for qualifying properties.

“Scotland has the lowest non-domestic rate for properties worth up to £100,000, ensuring over 95% of non-domestic properties in Scotland are liable for a lower property tax rate than anywhere else in the UK.”

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