The Summerhall Crisis

The Edinburgh arts venue Summerhall is being pursued for more than half a million pounds in a crippling legal battle over unpaid tax allegations. Summerhall’s management have complained about the “extremely challenging” legal restrictions which have left them unable to pay staff, suppliers and companies who are owed outstanding box office money.

This has led to tens of thousands of pounds being owed to performers, companies and artists from the 2024 festival, now currently resting with the Fringe Society who are refusing to pay out.

Summerhall has written to those companies who are in debt explaining: “I am writing to you with an update from Robert McDowell, Director of Summerhall Management Ltd, regarding the Court Hearing which took place on Monday 21st October. After hearing submissions from Summerhall’s lawyers and those for HMRC, the Sheriff was not prepared to dismiss the petition against Summerhall Management, neither was he prepared to grant a winding up order to HMRC and continued the case to 29th November, allowing HMRC to adjust their winding up petition in light of Summerhall Management’s answers.”

“While it’s good that Summerhall Management was not wound up at the hearing on 21st October as we continue to defend our position, we remain in a challenging situation. As explained previously, Summerhall Management’s bank accounts remain frozen. Your contract with Summerhall states that you will be paid your settlement monies by the end of October, however, that will not be possible due to this ongoing legal action and the restrictions placed on us.”

Artists are asking, quite rightly, why they cannot be paid via the Fringe Society? One artist, Laura Clare Horton commented:

Another award-winning playwright and comedian said:

Summerhall strenuously denies it owes HMRC money, and the venue has considerable goodwill amongst the artistic community, largely in the absence of anything else. On October 17 they issued a statement saying; “Summerhall Management is defending the winding up petition raised by HMRC, regarding monies they claim are due in Corporation Tax; a tax based on business profits. Our tax advisers and I do not believe that these monies are due.”

Summerhall also stated: “We have been unable to clarify our position through discussion with HMRC, so we must continue to defend through the court process. To defend this petition will take time, however we believe it is the right thing to do as it is the only way to protect the monies that we have in our accounts that are due to you.  

“As you are aware, you are also due monies from sales made through the Fringe Society Box Office. The team will continue to work with the Fringe Society following their communication on Friday 11th October to you regarding their position.”

Despite the goodwill for Summerhall, the position of the arts community in Edinburgh is now becoming absolutely critical. The ‘Summerhall Crisis’ is the crisis of the arts in Edinburgh, and Scotland writ small. How is it possible that such infrastructure is privately owned and subject to instant sale on the private market? Where is the legacy of decades of money pouring through Edinburgh? Where is the government support for the culture sector?

The most likely outcome of the present crisis is dozens of hard-working and talented artists being paid nothing and a major venue closing and being turned into flats. It’s almost guaranteed nothing will be done about any of this, apart from some protests, and some mild outrage.

One theatre producer, who wanted to remain anonymous contacted us to say:

“Our company is owed 12.5k, over 10k of that is with The Fringe Society. It’s sitting in their bank account. We took our show to Summerhall in good faith & we have a half a dozen creatives waiting to be paid. The fringe society simply needs to find a solution and pay the artists who took our shows to their festival. Is their plan to hold onto our money until the matter between hmrc & Summerhall is resolved? Because that could take years. The artists have been forgotten in this whole debacle and the fringe society have an obligation to its community. If they don’t pay, why would anyone take a show to the fringe again?”

We contacted the Fringe Society about these issues but they were unable to make any comment ahead of publication. If we do hear from them we will update this article.

Comments (7)

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  1. Iain Patterson says:

    Shocking that so many artists have been in limbo and Summerhall staff remaining unpaid ……..until a decision is made late November
    The Scottish Government and Edinburgh City must step in to support such a vital artistic hub

  2. Graeme McCormick says:

    I don’t know the specifics of the court papers but it’s probable that the Fringe Society are prohibited in releasing any funds if they were acting as an agent for Summerhall, to preserve the assets of the company in case it is would up . HMRC would have a prior claim before unsecured ordinary creditors. Winding up, sequestration, etc are horrible and inequitable processes where invariably the powerful creditor’s rights kick those of weaker cash strapped ordinary creditors into the dust.

    1. Mark Howitt says:

      This seems likely. The other thing we don’t know is the timeline in any of this (ie when the HMRC investigation started) but it does beg the question why the Fringe Society can’t pay out box office monies to artists more promptly after the end August festival season. It just can’t be that hard these days.

  3. Statan says:

    If they are unable to pay staff, suppliers and companies who are owed outstanding box office money, how come they can pay lawyers?

  4. Wul says:

    Pity that there’s never been enough income generated by the Festival to create an artists hardship fund or emergency reserve.

    In the summer of 2023 Visit Scotland said:

    “Key findings from the [impact] study:

    Edinburgh Festivals are world leading cultural brands

    3.2 million attendances generated by around 700,000 attendees

    Remain on a par with FIFA World Cup [3.4 million], despite reduced scale in 2022

    Edinburgh Festivals are increasing economic powerhouses

    Economic impact increased in Edinburgh from £280 million [2015] to £407 million [2022]

    Economic impact increased in Scotland from £313 million [2015] to £367 million [2022]

    Edinburgh Festivals are important drivers in the national economy

    Proportion of non-Scottish staying visitors increased from 25% [2015] to 31% [2022]

    Spend by non-Scottish staying visitors increased from £95 million [2015] to £137 million [2022]

    Impact supported 5,000 full time equivalent (FTE) jobs across Scotland

    Edinburgh Festivals provide crucial support to city jobs and livelihoods

    Impact created 5,850 FTE jobs in Edinburgh [5,650 in 2015]

    51% of spend on accommodation (c£85 million), 25% on food & drink (c£42 million) and a further 19% on shopping (c£31 million)

    Edinburgh Festivals offer incredible value for money

    Generate £33 in economic impact for every £1 invested from the public purse”

    1. The Festival (s) are awash with cash.

  5. Lee says:

    Yeah yet another Edinburgh Festival, no reason why they can’t pay their share now!.

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