Founder Robert McDowell disputes the claim, stating that tax is only owed on profits and not on investments and asset sales.

He has revealed the business is using “professional advisors” to resolve the dispute.

Mr McDowell told the BBC: “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.”

While the venue will continue to operate, Mr McDowell admits the legal action will impact some tenants and operations. This development comes after Summerhall secured a three-year lease in July following its listing for sale in May.