Car mecca closes amid ATO dispute
What’s left of a $70 million privately-owned car collection featuring some of the world’s most exotic vehicles will go under the hammer after a dispute between its owner and the ATO.
The Gosford Classic Car Museum has closed with the loss of 40 jobs after a two-year battle with the Australian Taxation Office.
Opening in 2016, the $70 million museum boasted the largest privately-owned car collection in the Southern Hemisphere and quickly became the Central Coast’s hottest new tourism attraction with 10,000 visitors through the gates a month.
However after nearly three years owner Tony Denny has pulled the pin, citing irreconcilable differences with the tax office which meant the museum was “left with no alternative but to close its doors”.
“I’m just so incredibly saddened and deeply disappointed the ATO couldn’t see reason,” Mr Denny said.
The site of the museum, the former Bunnings building at West Gosford, has been listed for sale while the cars will be liquidated in a fire sale organised by Lloyds Auction House on April 6-7.
All cars will be auctioned at no reserve. Some cars up for sale include a Ferrari la Ferrari 2015, Ferrari 512 Berlinetta Boxer 1978 and a Ferrari 365 Boxer Gt4 1975. Others include a 1985 Lamborghini Countach 5000 QV, a 1999 Diablo SV, a 2006 Aston Martin DBRS9 and a
Chrysler 300F.
Also among the collection is a Pontiac GTO convertible, considered the Holy Grail of muscle cars.
The decision to close also torpedoes plans for a seven-storey, eco-friendly tower at the site featuring 6500sq m of retail floor space, world class auction house, display suits, gym and call centre.
Central Coast Council approved the Development Application in March last year, which would have created 200 new jobs and included a solar panel system that would generate enough electricity to power both it and the museum independent of the grid.
Auto Invest Pty Ltd was established in January 2015 as a car dealership with the intention of trading under the name Gosford Classic Cars and using its showroom as a unique way to market the vehicles, while at the same time giving the public access to such a vast collection and the Coast a much needed tourism drawcard.
Workshop manager Jason Fischer — who is among 40 staff to be let go — said the company sought advice from PricewaterhouseCoopers, law firms and the Motor Traders Association to ensure its business structure complied with relevant tax laws and industry regulations before opening its showroom.
He said it also approached the ATO in February 2016 and provided a questionnaire outlining its business model including an admission fee that would be used to cover some, but not all, of the costs of operating the “museum” component.
Mr Fischer said they did not hear back from the ATO, which they took as tacit approval for the business model.
The showroom opened in April, 2016, and was quickly lauded as the Coast’s hottest new tourism attraction, which even saw then Prime Minister Malcolm Turnbull hold his 62nd birthday celebrations surrounded by 500 friends and family.
By December 2016 the ATO launched an audit.
The following September the ATO issued the dealership an audit paper which essentially found that because Auto Invest used “museum” in its trading name, charged admission, had cars in the showroom which were different to those ultimately purchased by customers and that not all the general public were coming specifically to buy vehicles, it was operating as a dual-purpose venture.
According to the ATO this meant Auto Invest was not eligible for luxury car tax (LCT) and GST exemptions.
Mr Fischer said the company argued the museum concept was used to promote the sale of cars only and wasn’t a commercial purpose in itself.
He said even if the museum was a commercial purpose, it was ancillary to selling cars and therefore the tax exemptions under LCT and GST laws would still apply.
“The ATO also declined to explain why they consider promotion of trading stock using the museum concept is a secondary purpose, and therefore unacceptable, while other dealerships buying vehicles as a means of promoting their stock is acceptable,” Mr Fischer said.
“We still have no answer from the ATO on why, as a matter of principle, promoting new vehicles by purchasing cars for test driving and inspection only is acceptable, while promoting the sale of cars using the museum concept is not.
“It is unclear why the ATO has applied the dual-purpose test differently in Auto Invest’s case than it has for dealerships which purchase vehicles purely for use as demonstrators.”
He said the ATO ordered Auto Invest to stop using the word `museum’ in its name, stop charging admission and stop advertising.
However this saw visitation plummet to less than 1000 a month with losses of more than $2 million a year making the business unviable.
Mr Fischer said Auto Invest requested the ATO enter alternative dispute resolution, but despite initially agreeing to meet, the ATO issued its final assessment.
Faced with the prospect of spending the next 18 months to two years fighting the decision through the courts, Mr Fischer said the company had no other option than to close.
Winds of change! Aussie sailor blazing new trail in America’s Cup waters
Growing up Annie Wilmot was surrounded by America’s Cup sailors and one very famous history-making uncle. Now she’s a Cup trailblazer herself.
Future Olympians! Try-fectas, close calls in Next Gen 7s battles
There were blowouts, close calls, a hot boot and multiple try-fectas in the opening round of the Next Gen Sevens rugby series in Sydney. Stars, great photos and Rd 1 result wrap.