Exclusive:'Nightmare' continues for Summerhall performers as tax case 'limbo' extended

The management company that has run Summerhall for more than a decade says it has effectively been "placed in limbo" after its ongoing legal battle with His Majesty's Revenue and Customs was continued until mid-February.

Emergency talks will be held over the next few days over the future of the venue after a court ruling was delayed for a second time. The venue had its bank accounts frozen after a winding up petition was raised by HMRC last month,

The move affected box office takings and other fees for shows, which had been recently staged at the venue. These included all Fringe performances this summer, and a number of events and festivals which had still to take place.

The Fringe Society, which is thought to have sold the majority of Summerhall's festival tickets this summer, has told affected artists and companies that it is "totally gutted" by the new delay, which has put the case back until February 14.

The arts charity, which is thought to sell the majority of Summerhall's tickets, has been given legal advice not to pay out box office money to artists directly while the HMRC case is ongoing.

Summerhall Management's director Robert McDowell previously revealed it was being pursued for more than half a million pounds in corporation tax for 2016, 2017 and 2018 and had been accused of making £1.5m in undeclared profits for that period.

Mr McDowell has insisted that no corporation tax is due and the case will be defended. But he has warned the frozen bank accounts and the restrictions on Summerhall's ability to trade normally were "extremely challenging", and had led to its events calendar being "decimated".

However, in a statement discussing the delay in the HMRC case, Mr McDowell admitted it had arisen due to an "accounting error" that had been made more than ten years ago.

Summerhall has faced an uncertain future since the building, which is owned by a separate company, was put on the open market in May, days after the launch of the Fringe programme.

A luxury housebuilder was named as the preferred bidder for the site at the end of October, weeks after Summerhall Management revealed it was the subject of an HMRC winding-up petition.

In his statement on the new delay to the case, Mr McDowell, who founded Summerhall in 2011, said: "I was not expecting this to be the outcome. I will now need to take some time to consult with our professional advisors and map out our next steps over the coming days.

"Summerhall Management Limited has been placed in limbo for a further three months and our bank accounts remain frozen, making it impossible to pay artists the box office receipts. A result either way would at least have enabled some certainty.

"Whilst I am confident that there is no corporation tax due, I will now look at any and all options available to me that offer the best outcome for my staff, the Fringe companies and other stakeholders who are affected.

"I established Summerhall to help and support artists in our city, and especially during the Fringe. That it has come to this because of an accounting error made over ten years ago causes me great personal pain and anguish.

"I would like to apologise to everyone who has been affected by the current situation."

In an email to performers and companies, the Fringe Society's head of artist services, Chris Snow, said: "As you'll know from Summerhall's statement, the court proceedings have been delayed further, with a next hearing date of February 14.

"This is obviously very disappointing and we appreciate how stressful this news will be for all of you. We understand that Summerhall are considering their next steps, so with that in mind we wait for a further update from them, and will be back in touch with you all as soon as we can.

"I hope it goes without saying how totally gutted we are that this continues to drag on for now. We will write to you again by the end of next week."

Laura Horton, writer of the Fringe show Lynn Faces that was staged at Summerhall this summer, is owed around £15,000.

She said: "I've had to try my best to suspend my anxiety over this nightmare situation, knowing that there is nothing I can do. To receive the update from the Fringe Society that we now have to wait a further three months for a decision is a terrible blow.

"I don't know how to process or plan in this limbo. I'm finding the impact of this on my career and my nervous system extremely distressing."

Comedian, actor and writer Anna Morris, who staged the Fringe show Son of a Bitch at Summerhall, said: "I thought I would have some clarity. Instead, we're left with another three-month wait, which has exacerbated my anxiety further. I feel financially and mentally demoralised. I'm also left with a lot of questions about how this has happened.

"I ask the Fringe Society to urgently address concerns over contracts they have with venues, so this doesn’t happen again next year. They should not be legally bound to owe the venues the box office money unless they know the venue is financially sound."

The Fringe Society has previously insisted that "actively holding" box office pay-outs which are due to Summerhall Management for shows this summer offers the "highest likelihood of protecting the money which artists and companies are waiting for”.

A Fringe Society spokesperson said: "The ongoing delays to a resolution are understandably causing frustration and disappointment for the Fringe community."