Exclusive:Crisis-hit Fringe venue Summerhall was pursued for years over unpaid tax claims

Bosses raised alarm privately with Scottish Government and Edinburgh City Council during this year’s festival over prospect of legal action

A crisis-hit Edinburgh "arts village" was being pursued over alleged unpaid tax for several years before it was hit with legal action that threatens to close down the venue.

Leaked emails have suggested His Majesty's Revenue and Customs has been demanding the privately-running Summerhall complex make corporation tax payments since at least 2020.

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

The correspondence has emerged amid growing concern over hundreds of thousands of pounds of box office money due to artists, companies and promoters who have staged events in recent months, including more than 100 Fringe shows.

The emails reveal the venue's management raised concerns during the middle of this year's Fringe with both the Scottish Government and Edinburgh City Council over the prospect of Summerhall being served with a winding up order.

Summerhall has become a leading Fringe since it first hosted shows in 2011. Summerhall has become a leading Fringe since it first hosted shows in 2011.
Summerhall has become a leading Fringe since it first hosted shows in 2011.

The legal action was raised weeks before it emerged the family-owned venue was on the verge of being sold to a luxury housebuilder.

HMRC has raised concerns that it was kept in the dark over plans to sell off the building, which were kept under wraps until after its Fringe programme was launched, while an investigation was ongoing.

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Summerhall did not publicly admit it was facing legal action until October 7, more than a month after the Fringe had drawn to a close and record ticket sales of more than 103,000 had been announced.

Summerhall founder Robert McDowell. Picture: Neil HannaSummerhall founder Robert McDowell. Picture: Neil Hanna
Summerhall founder Robert McDowell. Picture: Neil Hanna

The Fringe Society, the arts charity that sells the majority of Summerhall's festival tickets, insists it was not told about the HMRC investigation until the end of September, after court action had been instigated.

Summerhall's Fringe performers and companies have been left in financial limbo as the winding up petition has led to the venue’s bank accounts being frozen.

The Fringe Society has been given legal advice not to make payments directly to anyone involved in Summerhall shows this August while the legal case is ongoing.

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Summerhall Management Ltd, which has run the venue since it was founded by arts philanthropist Robert McDowell in 2011, is contesting claims that it has failed to pay more than £500,000 in corporation tax, insisting it does not believe anything is due to HMRC.

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

However, the leaked correspondence reveals Summerhall bosses asked HMRC for more time earlier to settle "VAT liabilities".

The leaked correspondence suggests HMRC was told in December last year that steps were being taken by Summerhall to raise funding to pay its debts, which was "likely to involve the sale of assets".

However, Mr McDowell, the sole director of Summerhall Management Ltd, insisted the sale of Summerhall and the legal action by HMRC were "two separate issues". He confirmed papers for the winding up petition were lodged in court on September 19.

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He said: "The building was put on sale by the owners in May precisely because it [Summerhall] is loss making and the majority of the shareholders in the company that owns it felt it was time to hand over the baton of supporting the arts in Edinburgh.

"It is ironic then that the court action brought by HMRC concerns these non-existent profits.”

A Government spokesperson said: "Summerhall is a valued cultural asset supporting a year-round calendar of events, community projects and the annual Fringe programme.

"The ongoing dispute between Summerhall and HMRC has created severe financial consequences for a number of arts and theatre companies. Ministers would urge all involved parties to work together to ensure money owed from Fringe performances can be released as planned, to minimise the immediate impact for artists.”

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A spokesperson for the local authority said both council leader Cammy Day and culture convener Val Walker had contacted Summerhall's owners to warn it would be a "terrible loss for the city" if the site was developed for any purpose other than cultural provision.

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