Derrimut 24:7 takes action against ATO over $14.6 million tax debt

Controversial gym chain Derrimut 24:7 is reported to be in dispute with the Australian Taxation Office (ATO) over repayment of a multi-million tax debt.

Last week the Lawyerly website advised that the chain is taking legal action against the ATO over its refusal to accept a plan to repay a $14.61 million debt covering GST and withholding taxes in instalments.

Derrimut lodged an application with the Federal Court in April to challenge a decision by the Tax Commissioner to reject the company’s request to pay its debt.

This week Melbourne's The Age has reported that Derrimut’s founder, Nikolaos Solomos, is being personally pursued over unpaid taxes and staff superannuation. Solomos is subject a claim by the ATO lodged at the County Court last month to recover $11.34 million of the owed money.

The chain, which operates 27 'big box' gyms across Victoria and South Australia, is reported to be being pursued by the ATO over $5.06 million in GST and $4.62 million in pay-as-you-go (PAYG) withholding taxes for the period from September 2022 to January 2025.

The documents also show a claim of $250,569 for unpaid superannuation and $1.4 million for Solomos’ personal income tax.

Court documents show Derrimut disputes the Tax Commissioner’s findings that its cashflow projections didn’t support its suggested payment plan and that the total equity of properties it was proposing to provide as security was unclear.

If the ATO successfully holds a company leader personally liable for tax debts through a director penalty notice, personal assets can be seized, bank accounts farmed and bankruptcy filed.

The dispute comes at a time when the chain is expanding from suburban locations into more central sites having opened a 4000-square-metre gym in Port Melbourne in late 2024. Reports indicate it is planning to open its first CBD site at the former Bourke Street location of fitness centre Virgin Active, which closed last year.

Derrimut’s most recent openings have sparked disputes with local councils over numbers of members within the facilities and parking.

Solomos is understood to have narrowly escaped an attempted murder in 2015 when a masked gunman shot through the window of the car where Solomos was parked in the driveway of his Burnside home. The gunman was later linked to a rival gym owner with ties to the Comanchero bikie gang.

Solomos has denied having any ties to organised crime.

Image: Derrimut 24:7 in Pakenham.