Edinburgh arts centre Summerhall hit with 'winding up' action by HMRC as events to be axed

Edinburgh arts centre Summerhall was put up for sale in May. Picture: Mihaela Bodlovic

Edinburgh’s troubled arts centre Summerhall is facing a new crisis after being hit with a “winding up” legal action.

His Majesty’s Revenue and Customs have begun proceedings against the management company which has run the “arts village” over unpaid tax allegations.

Edinburgh arts centre and Fringe venue Summerhall was put up for sale in May.

Summerhall founder Robert McDowell has pledged to defend the case, but admitted the legal action may affect how the venue is able to keep operating.

It is understood the winding up petition may affect Summerhall’s ability to stage and host certain events, as well as impact on existing tenants.

The organisers of the Edinburgh International Poetry Festival, which is due to go ahead at Summerhall in November, were forced to postpone its programme launched after being alerted to the HMRC’s legal action.

A statement from Push The Boat Out, which has lined up 130 artists and performers to appear in the three-day event, said it was “deeply concerned” at what the winding up order would mean for the festival.

Summerhall has been hosting cultural shows and events since 2011.

The legal action from HMRC has emerged days after the launch of an “urgent” public appeal to help safeguard the future of the venue.

At the time, senior figures at Summerhall, which has been running since 2011, raised concerns that arts and culture in Scotland are "drowning under the weight of an economic crisis."

The future of Summerhall has been increasingly uncertain since May when it emerged that the entire 130,000 sq ft site had been put up for sale by Oesselmann Estate Limited, an Isle of Man-based company.

Summerhall Arts, a new arts charity formed last year, is trying to raise £150,000 through a crowdfunding campaign to try to maintain the current levels of programming at the venue.

It is hoping to secure a lease agreement with OEL to keep the venue running for the foreseeable future after it changes hands. A new owner of the site is yet to be announced.

One of the biggest privately-owned multi-arts centres in Europe, Summerhall is home to more than 120 businesses and freelances, and attracts an audience in excess of a million each year, including 250,000 in August alone.

More than 100 different shows and events were staged at Summerhall during this year's Fringe, while the venue was used for Edinburgh International Film Festival screenings.

The statement from Push The Boat Out said the HMRC action had an “immediate impact” on its ability to sell tickets through Summerhall and also raised questions about whether the festival could go ahead there.

It added: “We took the difficult decision to delay announcing our programme while we establish more clarity and investigate potential solutions.

“As a small charity, this is a hugely challenging development and we are deeply concerned about what it means for our festival, the artists involved, our partners and audiences.

“We are working hard to ensure the festival can go ahead, either at Summerhall or in an alternative venue.”

Mr McDowell said: “Summerhall Management has had a winding up petition presented against it by HMRC.

“The petition is in relation to unpaid Corporation Tax. We believe there is no corporation tax due to HMRC and have been working with professional advisors to address and resolve matters with HMRC.

“We are defending the proceedings raised and we hope a resolution can be achieved which will allow us to deal with this and move on quickly.

“At this time, we must follow a very strict set of guidelines imposed upon us of what we can and cannot do. The team are already in communication with those we work with who may be affected by this action, but we intend to trade as best we can, and in line with what is permissible, whilst we defend this action.”

Sam Gough, who is chief executive of both Summerhall Management Ltd and Summerhall Arts, said: “We are taking legal advice on what we can and can’t do. Once we understand that, we will getting in touch with everyone affected.

“During this process, which could take a number of weeks, it means that some things will be able to go ahead, some things will have to go ahead differently and some things will have to be cancelled.

“Summerhall Arts is unaffected by any of this, because it is an independent charity. The discussions on the lease are still going on in the background.”