Edinburgh arts centre crisis averted as Summerhall winding up bid is dropped

Edinburgh arts centre Summerhall has been running since 2011.

A financial crisis threatening the future of one of Edinburgh's leading arts centres has been averted after a winding up order over alleged unpaid tax was abandoned.

Summerhall's management have announced that His Majesty's and Customs has dropped a legal action that led to its bank accounts being frozen.

Edinburgh arts centre and Fringe venue Summerhall has been running since 2011.

The move means it has now been able to pay out all box money which has been due to artists, performers and companies, including more than 100 shows staged at this year's Edinburgh Festival Fringe.

The Fringe Society, which sells the majority of the venue's festival tickets, has also released the Summerhall box office income it was holding. It had been given legal advice not to pay out the box office money to artists directly while the HMRC case was ongoing.

There was widespread dismay in November when Summerhall's management said they had been "placed in limbo" after the winding up action was continued until February. However, the case was withdrawn just before Christmas, allowing Summerhall to get access to its bank accounts.

The dropping of the HMRC case is expected to see Summerhall, which has been hosting live events and exhibitions since 2011, return as a Fringe venue this summer.

Summerhall Arts, a new arts charity, created in 2023, is also set to take over the running of the venue for the foreseeable future under a lease agreement with a luxury housebuilder expected to pursue a long-term redevelopment of the site.

Summerhall has been facing an uncertain future since it emerged the entire site was being put up for sale in May last year.

Hopes of a reprieve for the venue emerged in July when Summerhall chief executive revealed plans for the arts charity to take over the running and year-round programming of the site.

However, in October Summerhall founder Robert McDowell revealed the first details of the HMRC investigation, which prevented the venue from selling tickets for future events or paying out box office payments for shows and events previously staged at the venue.

Mr McDowell has consistently maintained that he was confident there was no corporation tax due over Summerhall and blamed an "accountancy error" for the HMRC investigation.

In a new statement, he said: "I can confirm that the petition to wind up the company over alleged unpaid corporation tax was withdrawn in the run up to the Christmas break.

"This brings an end to this action against Summerhall Management, and there will be no further hearings about this matter.

"Access to Summerhall Management's bank accounts was restored in late December, including all box office money belonging to artists, which has meant that we were able to complete all Fringe and other box office payouts before Christmas.

"Whilst we appreciate that these payments were late, we were able to complete the pay-out process quickly, as soon as we were able. I would like to thank all those that were affected for their patience.

"Regarding the future, conversations with other stakeholders, including Summerhall Arts, continue.”

A spokesperson for the Fringe Society said: “Pay-out of the 2024 Fringe Box office settlement to Summerhall was completed at the end of December. We are pleased that this has resolved any ongoing uncertainty and worry for the affected artists.”