Fringe venue given winding up order over unpaid tax

Summerhall was threatened with closure earlier this year and now faces a corporation tax demand from HMRC

An Edinburgh Festival Fringe venue threatened with closure earlier this year has been served a winding-up petition by HMRC.

The founder of the Summerhall campus is disputing the order for unpaid corporation tax and believes the levy is only owed on profits.

The venue in the former Royal Dick Veterinary School near the Meadows was put up for sale by its owners in May, but the charity which operates it was later granted a three-year lease to remain at the site.

Robert McDowell, who took over the facility in 2011, said management would fight the case, but the action would affect how some parts of the venue may operate.

The venue, spread across seven buildings, is home to more than 100 businesses including a brewery and a cinema.

In a statement, Mr McDowell said he believed no corporation tax was due to be paid to the authority by Summerhall Management Ltd, the firm which runs it on behalf of owners Oesselmann Estates.

The charge applies to trading profits, investments and “chargeable gains,” or selling assets for more than they initially cost.

If it is not paid, creditors, in this case HMRC, can apply for a winding up petition - which if successful would place the company into liquidation.

Mr McDowell said the company was working with “professional advisors” in order to resolve the dispute.

However he warned it was now operating under a “very strict set of guidelines” which may affect some tenants.

He said: “We believe there is no corporation tax due to HMRC and have been working with professional advisors to address and resolve matters with HMRC.

“Summerhall management 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.

“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.”

Listed for sale

An HMRC spokesperson said it would not comment on individual cases, but would support customers to find the “best possible solution”.

The action comes just three months after a new three-year lease for Summerhall to remain in the building was agreed.

Oesselmann Estates, which is based on the Isle of Man, put it up for sale in May.

An estate agent listing suggested it could be converted into a “boutique hotel or student accommodation”.

However, Summerhall Arts, a charity set up to take over events at the venue, agreed the 36-month extension in July.

That deal covers up to 25 exhibition spaces, galleries and theatres as well as the bar and beer garden.

A closing date of 18 September was previously set for the building's sale.

It is not known whether any offers have been successful.