THE operators of Elliot Street car park punish those who do not pay.

“Full and correct vehicle registration must be entered in to the payment machine,” reads a sign on its wire fence. “Failure to comply with this may result in a parking charge notice of £100.”

This is central Glasgow, close to the Clyde’s Anderston Quay and the city’s booming exhibition centre. Business looks good. Parking is at a premium. The lot, once a gap site, is full.

It is cheap too. Fifty pence an hour. £3.50 a day or £15 a week. It is £5 to leave your car from six to midnight, when the nearby Hydro, Scotland’s biggest concert venue, can be full to its rafters.

So cheap, indeed, is Elliot Street that a local news site described its opening as “amazing news”.

“It was music to our ears when we heard that Glasgow’s cheapest car park was about to open in one of the city’s hottest spots,” gushed Glasgow Live in 2018. “Happy days. Less time driving in circles on the lookout for a cheap and easily manoeuvred spot and more time enjoying the city.”

There is a problem, however. Nobody running Elliot Street car park has ever paid any local businesses taxes. Its operators may fine motorists who do not pay. But they have faced no consequences for not paying non-domestic rates (NDR).

The outstanding balance for the tax at the site is £343,963.26, according to figures obtained by The Herald.

At the best value rate offered at the 400-space site, you could leave a car there for nearly 63 years for that kind of money. Or you could park 98,000 vehicles for a day. Or – and this is the kind of thing that bothers council officials – pay the annual salaries of 10 teachers.

This weekend, Glasgow City Council announced it would start naming and shaming businesses which do not pay their rates.

The local authority is reeling from more than a decade of austerity. Last week, it passed a tough budget increasing council tax for its citizens by 4.6% and making another round of cuts.

One of the services councillors voted to close was the Blairvadach outdoor centre at Shandon on the Gareloch. It has been helping young people learn pursuits like sailing and canoeing for 40 years. Up to 16 jobs are at risk. The saving? £218,000. Far less than the sums owed at Elliot Street.

As The Herald reported yesterday, some politicians are losing patience with those who avoid or delay payment of NDR.

Glasgow treasurer Allan Gow, from the ruling SNP administration, told the newspaper: “We always try to work constructively with businesses that encounter problems with rates – but it is an open secret that a minority of firms exploit legal loopholes to walk away from tens and even hundreds of thousands of pounds worth of debt, over and over again.

“That’s not fair on the majority of responsible businesses who do contribute, or on customers who rely on frontline public services.

“While the law can’t always help us stop these firms from gaming the system, we can give communities and consumers the information we have and let them make up their own minds about that kind of behaviour.”

So, how is it possible not to pay? Well, sometimes companies go out of business, with debts. And often those debts include some rates.

That is the case for GSM Management Solutions Ltd. It operated Elliot Street car park from May of 2017 until September of the following year. It was formally dissolved last October, owing more than £60,000 of the £343,000 outstanding balance.

The company had never filed any accounts. During the course of its brief existence it had three directors, though not all at once. They were Stuart Spence, John Rudden and Keith Kirk. The firm said it had no person of significant control so there is no way of knowing who its beneficiaries were.

The Herald on Sunday now understands that Glasgow City Council has written off the £60,000 debt of GSM. It cannot, after all, secure money from businesses which no longer exist.

That leaves another £283,638.25 in outstanding NDR due on Elliot Street car park. The council lists the current occupier of the site as another limited company, Lancefield Scotland Limited. A final notice has been issued for payment.

Now Lancefield Scotland is formally registered at 48 West George Street in Glasgow city centre. This is a virtual office, home to hundreds of companies and Scottish limited partnerships. It was also where GSM was listed.

Directors of Lancefield Scotland include Stuart Spence and John Rudden. Spence is also its person of significant control, effectively its beneficial owner.

So Lancefield has clear human links with GSM. It took over the car park on the day after GSM left it. It was founded in March 2018.

Unlike GSM, Lancefield has filed accounts for a micro-company. This document, filed in November 2019 and dated March 31 of the same year, says the business has total assets of just over £3,000 and no debts to pay for the next 12 months. It was signed by Spence.

Non-domestic rates are paid by occupiers, not owners. Green MSP Andy Wightman recently failed to convince the Scottish Parliament to make owners share responsibility when debts were not paid.

The Elliot Street car park is owned by a London company called GRDI Europe Ltd, which is in turn owned by a Northern Ireland entity called MRP Land Limited, which says it has no person of significant control. MRP, however, used to give its beneficial ownership as a business in Belize.

There was nobody at Elliot Street car park to ask for comment. The site is entirely automated. A buzzer intercom at the gate no longer worked.

The Herald on Sunday tried to contact the firm which manages the site, Smart Parking. Its telephone, in Perth, did not answer. There was no response by email either.

There was no immediate means to contact Spence for Lancefield Scotland Limited either.

The businessman, who is 56, has other car parking interests. He is also the sole director and person of significant control of 88 Washington Street Limited, which occupies another lot managed by Smart Parking at an eponymous address.

That address also has a huge outstanding bill for non-domestic rates – £312,857.31, according to council calculations seen by The Herald on Sunday.

This site, 88 Washington Street, is close to the Broomielaw – Wall Street on the Clyde – the giant Marriott and Hilton hotels, and the main shopping drags of the city centre.

The company, 88 Washington Street Limited, has been its official occupier since October. It is understood to be paying its rates in instalments.

However, five previous businesses which operated the site have built up debts. The council has written off most of them.

The local authority has appointed debt collectors to chase more than £95,000 from Universal Exports (Edinburgh) Limited, which occupied the site from October 2017 to September 2019. This company’s directors included Rudden, who gives his occupation as a security consultant, and Kirk. Kirk was listed as the beneficial owner.

Universal Exports was dissolved in December.

The council has written off the rest of the NDR debt for the Washington Street car park, all of which is owed by firms which do not exist.

This includes Central Quay Storage Limited, which was liable for the tax from May 2016 to October 2017. This company listed its person of significant control as an American resident called Mark Cummings.

It was set up by Spence in 2015. He resigned as a director in early 2017 before being reinstated for a single day at the end of that year. Kirk, too, was a director, but only for two weeks. Central Quay was struck off in December 2018.

Also written off are the debts of Arbuthnot Management Limited. It was solely owned by Kirk. It occupied the Washington Street car park from May 2014 to May 2016. As of April 2015, it filed accounts saying it was a dormant company. The firm was dissolved owing £95,000 in NDR.

Before Arbuthnot Management, council records show that the Washington Street site was occupied by another now dissolved company, New Alba Property. Its director, from February 2014: Kirk. It was dissolved owing nearly £38,000 in local taxes.

The site itself is owned by an Isle of Man company called Broomielaw Ltd. This business, under current rules, has no NRD liability.

A spokesman for Glasgow City Council said: “As previously confirmed, we have been forced to write off significant debt at both of these locations after a series of companies were dissolved while owing arrears. This does not, however, include the current registered ratepayer at 88 Washington Street.”

Uncollected business rates from the two car parks totals around £640,000. Scotland loses between £40 million and £50m in uncollected local business taxes every year.

Business insiders stress some firms do not survive and that non-payment is not evidence of avoidance.

The city is expected to start naming and shaming non-payers of rates early in the new financial year.

Non-domestic rates explained

Nothing about non-domestic rates is simple.

That, at least, was the take of Colin Borland, of the Federation of Small Businesses when he heard city leaders in Glasgow were going to proactively name and shame those who do not pay the tax.

Borland has nothing against the proposal in principle. He just wants to make sure that only real dodgers are named.

After all, most businesses pay their non-domestic rates, shortened to NDR. They might do so through gritted teeth, but they pay.

More than £2.6 billion is collected from businesses every year in Scotland. Rates are set nationally but collected locally. The Scottish Government says its regime is the most generous in the UK, that 95% of business pay less "poundage" than they would if they were in England and Wales.

The collection rate for NDR is high: around 98%. For council tax the figure is lower, 95%. Yet the total for uncollected tax may be as high as £50m a year. That is still a lot of money.

The 2% who do not pay – it has to be stressed – are not necessarily deliberately avoiding the tax. Some will simply have failed as businesses, leaving debts. A typical example might be a restaurant business which leased premises but did not survive a full year. There is not much councils can do if that restaurant folds before it pays its bills.

Can local authorities not simply tax the owner of the land if tenants do not pay? No.

There is a nuance here. Rates are paid by the occupiers or buildings or land, not by their owners. It is hard to avoid a property tax. Your asset is after all immovable. But NDR, while based on the rateable value of property, are not a tax on the property, but on the business which uses it.

The Scottish Government and Parliament are coming towards the end of a long process of reviewing non-domestic rates, including new legislation which includes anti-avoidance schemes. So far, MSPs do not look keen to hold owners responsible for unpaid rates bills – even those who repeatedly lease their property to firms which fold without setting their debts.