City Beach founders in court clash with the ATO
THE enigmatic tycoons behind the City Beach retail empire are locked in an extraordinary, high-stakes court battle with the taxman over demands they pay tax on an extra $125 million of income.
Entrepreneurs Melville Hicks and Carmelo Ierna, whose chain of more than 60 surf and streetwear outlets grew from their original Brisbane store, are at the centre of a string of lawsuits in a bid to avoid a collective tax bill of tens of millions of dollars. The tax fight also involves Mr Hicks’ retailer wife Maree Henry, who set up women’s fashion label Dissh from their family loungeroom and grew the business with daughter Lucy Henry-Hicks.
Mr Hicks, 67, and Ms Henry shun the spotlight, although their daughter’s social media posts give an insight into the photogenic family’s high life.
The war with the tax office was made public on July 14 when Mr
Ierna filed the first appeal in the Federal Court in Brisbane in a bid to reduce his tax bill. Four days later, Mr Hicks filed his appeal in the same court.
Mr Hicks has accused the Australian Taxation Office of slapping him with an “incorrect, excessive” tax assessment for the 2016 financial year, insisting his assessable income should be slashed by staggering $37 million. In a separate appeal, filed in the same court minutes later, Mr Hicks’ solely-owned company Hicks Beneficiary Pty Ltd (HB), has appealed the ATO’s decision to reject his bid to slash the company’s taxable income by $26 million for the 2016 year.
In a separate case Ms Henry’s wholly-owned company Dissh Pty Ltd is arguing its taxable income in 2016 should be cut by $10,351,862, and its 2017 taxable income should be about $1 million less. Dissh has 70 staff and is predicted to sell $70 million worth of clothes this financial year.