Summerhall: Tax dispute puts Edinburgh arts venue in jeopardy

HMRC have hit the company which manages Summerhall with a 'winding-up petition', claiming the Edinburgh arts organisation owe unpaid corporation tax. Summerhall are disputing the claim, but their programme of events will be disrupted

Article by Jamie Dunn | 07 Oct 2024
  • Summerhall

The Summerhall saga continues. Back in ​​May, the multi-arts hub in Edinburgh was put up for sale by its owners, the Isle of Man-based Oesselmann Estate Limited (OEL). Many feared the worst – i.e. its buildings being turned into student flats or a boutique hotel – but it seemed to get a reprieve back in July. A new lease was negotiated, with charity Summerhall Arts taking over the running of the former veterinary school’s various buildings and event spaces from Summerhall Management, and taking charge of delivering the full year-round programme. “Summerhall Arts are determined to find the best way to secure the future for Summerhall,” Summerhall Arts board member Debbie Christie said when this new arrangement was announced. “Our hope is that this interim three-year plan will ensure that we can continue and cherish all that is great about Summerhall.”

All this looks to be in jeopardy today, however, with Summerhall Management revealing that they have been hit by a winding-up petition over alleged unpaid corporation tax to HMRC. It is not known how much money HMRC believe Summerhall owes, but a winding-up petition – also known as a compulsory liquidation – can be filed against anyone owing as little as £750 who does not have the available funds to pay the debts. If successful, Summerhall Management and its assets would be liquidated to pay HMRC the money owed.

Summerhall Management announced the news this morning on the Summerhall Instagram account but claimed HMRC have made an error. “We believe there is no corporation tax due to HMRC and have been working with professional advisors to address and resolve matters" says the statement, attributed to Robert McDowell, who is a director at both Summerhall Management and OEL. Summerhall Management say they are challenging this winding-up petition and hope to resolve the issue quickly, but it sounds like this will cause considerable issues for the organisation. “At this time, we must follow a very strict set of guidelines imposed upon us of what we can and cannot do,” they say. “Please bear with us whilst we work to fully understand the situation.”

In this initial statement, Summerhall Management haven’t been explicit about these restrictions, and suggest they will stay open in some form, but it looks like there will be considerable disruption to their programme. We know at least one event in the near-future has been affected: Microsteria, the immersive club night from the Edinburgh duo Maranta, which was due to take place on 26 October at Summerhall, has been cancelled, citing “issues outwith our control” while signposting today's Summerhall announcement.

We reached out to Summerhall Management for more info, and their press team told us that “for now, events are going ahead on a case-by-case basis.” For example, tomorrow night’s Baby Bushka event will still go ahead as planned. They added: “Summerhall are working with each artist and client directly. Summerhall are working to trade as best they can under the prescribed rules during this process.”

Summerhall Management's press team also reassured us that “[permanent] staff are protected during the action” although freelance staff will be affected. They also reminded us that Summerhall Arts, the organisation that hopes to take over the day-to-day running of the arts spaces within the building, is separate from Summerhall Management. They say: “Summerhall Arts and its fundraising campaign is unaffected by this action and continues its commitment and work to preserve the future of artistic provision within Summerhall after and beyond the details of the building sale are announced."

Speaking to The Scotsman, Sam Gough – chief executive of both Summerhall Management and Summerhall Arts – said: “We are taking legal advice on what we can and can’t do. 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."

This is not the first time Summerhall has had issues with HMRC. The Herald reported on the organisation's 2013 dispute with the taxman, which seems to have been quickly resolved at the time. We can only hope the same is the case here.

More to follow as this story unfolds.