AN arts centre in Scotland has issued a statement insisting "no corporation tax is due" and HMRC is "incorrect" in pursuing £500,000 with legal action.
Lawyers working on behalf of Edinburgh's Summerhall venue have confirmed intention to defend against proceedings started by HMRC against management over unpaid tax allegations.
Founder Robert McDowell released the update on Monday, arguing the venue has made losses annually and the corporation tax figure of £500,000 which HMRC are pursuing is "incorrect".
The venue claimed the winding up petition has affected Summerhall’s ability to stage and host certain events, pay suppliers, refund customers or pay staff.
We previously told how a three-year lease had been secured for the venue after its future was cast into doubt earlier this year.
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McDowell said: “Summerhall Management is continuing to defend the petition to wind up the company that was recently served upon it.
"To give some context and transparency, HMRC are pursuing Summerhall Management for over half a million pounds in corporation tax from many years ago, (for 2016, 2017, & 2018) claiming that we have made £1.5 million undeclared profits in those 3 years, which our tax advisors and I believe is incorrect.
"According to our annual accounts since 2012 and verified by our independent accountants, Summerhall Mgmt Ltd. has in fact made a loss annually."
He added that the decision to defend the action had been taken to ensure the venue could continue to trade despite restrictions.
"These restrictions have been extremely challenging, especially without access to our bank accounts. We cannot pay out box office income, make essential stock purchases, pay suppliers, refund customers or pay our staff payroll.
"Our events calendar has also been severely impacted. Some events have been moved to alternative venues or cancelled, whilst events requiring no financial outlay can go ahead."
The venue intends to work with advisers and HMRC to defend the "belief that no corporation tax is due".
Senior figures at Summerhall, which has been running since 2011, previously raised concerns that arts and culture in Scotland are "drowning under the weight of an economic crisis."
The future of Summerhall has been increasingly uncertain since May when it emerged that the entire site had been put up for sale by Oesselmann Estate Limited, an Isle of Man-based company of which McDowell is a director.
Summerhall Arts, a new arts charity formed last year, is trying to raise £150,000 through a crowdfunding campaign to try to maintain the current levels of programming at the venue.
It is hoping to secure a lease agreement with OEL to keep the venue running for the foreseeable future after it changes hands. A new owner of the site is yet to be announced.
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