Accountancy Age speaks to Steve Lewis, the coffee shop owner who wants to become the next leader of HMRC and go head-to-head with tax avoiding multinationals
YOU may have seen him on BBC Two’s recent tax avoidance documentary The Town That Took on the Taxman, where he and a group of fellow SME owners explored the murky world of offshore tax avoidance and then attempted to replicate the techniques used by multinationals.
The show was an attempt to educate more people on how little money foreign corporations are contributing to the UK’s coffers, and since the show aired Steve Lewis, the coffee shop owner at the heart of the TV show, has been on a mission to change the way government handles multinationals and their tax avoidance behaviour.
Lewis heads up The Fair Tax Town campaign, a movement that aims to present a new tax scheme to HMRC that clamps down on big corporations. If the scheme is rejected, Lewis and everyone who has signed up to the campaign will threaten to take their tax offshore, which Lewis predicts could be as much as £1bn.
As well as taking on HMRC, Lewis also plans to become its next leader.
The former army officer has launched a petition urging the British public to consider him as a successor to outgoing HMRC chief Lin Homer. So far the petition has nearly 150,000 signatures.
The SME owner dubs himself ‘the people’s taxman’ and is challenging the government to “appoint someone who champions ordinary citizens and understands small businesses”.
Speaking to Accountancy Age, Lewis makes his intentions clear as to how he would reform HMRC if he becomes the department’s next chief exec.
“I absolutely understand how the corporate world makes its decisions, what they are sensitive to and how their balance sheets add up,” says Lewis. “What’s needed at HMRC is not more tax understanding or tax law, but someone who is a change leader.”
One of the first things that Lewis would do at the helm of HMRC is change the way the department deals with aggressive tax avoiders. Over the past 20 years, HMRC has given large firms every incentive to avoid paying any rate of corporation tax, Lewis suggests.
“If large companies wanted to avoid paying tax under a certain amount, I would then make it a public negotiation which would clamp down on aggressive tax avoidance from individual firms. That would stop that behaviour overnight,” he says.
Lewis is among a handful people touted as a potential candidate for the HMRC gig. Other names include HMRC’s director general of business tax Jim Harra, but having spent time with him during the making of the documentary, Lewis doesn’t feel like Harra is the right man for the job.
“He’s a good guy. The guy has got great integrity but he comes from a civil service background and you don’t need a civil servant in there.
“You need someone that understands the enemy and one of the things that Harra said very tellingly is that HMRC ‘manmarks the guys we know are risks’, which makes multinationals believe that ‘manmarking’ is just part of the negotiation process.”
When we asked Lewis what he thought of his chances of replacing Homer, he gave himself odds of 1,000/1, but others have more faith in the coffee-shop owner. Bookmakers William Hill has given Lewis improved odds of 500/1.
Being a small business owner himself, Lewis is supportive of SMEs, and is campaigning for greater transparency at all levels so smaller firms can be put on a ‘level-playing field” with multinationals when it comes to tax.
“I don’t think small business owners need any help, but I do want to take on big businesses by putting their brands at risk. If they want to become aggressive tax abusers, that discussion would then be held publically.
“Take Caffé Nero for example. I’m a coffee shop owner, I don’t need any help running my shop or any tax breaks, but what I need is for Caffé Nero, a business which turned over £1.6bn in 2008 and paid zero corporation tax, to pay their taxes so they raise their prices so I can compete with them,” added Lewis, who revealed that he’s rejected two separate buyout approaches from major coffee shops over the past two years.
However, Lewis isn’t just frustrated by multinationals, he also has a bone to pick with Gordon Brown.
Discussing the latest corporation tax scandal involving the government department and search engine firm Google, Lewis says he lays no blame with either party, but roundly criticises George Osborne and in particular the former chancellor for creating a tax culture in which multinationals can thrive in.
“Gordon Brown actually came to my coffee shop when he was chancellor. I happened to be away, but my team rang me up and said ‘you’ll never guess who’s just walked in with his entourage.’ I told them to throw him out. They told me they couldn’t do that but I said ‘you bloody well can, throw him out.”
“They didn’t do it in the end as they thought it would be bad publicity, but I told them you’ll get no publicity by inviting the chancellor in for a coffee, but you’ll get huge publicity by throwing the bastard out”.
Lewis and his Fair Tax Town campaign are moving extremely quickly with their plans to clamp down on multinational tax avoidance.
Last week his campaign launched its ‘return to sender protest’ against e-commerce giant Amazon, whereby Lewis buys the largest, most expensive item he can find on the site, then sends it back using the company’s free returns policy.
He will take a personal stand by returning an Amazon product with a Fair Tax Town return to sender stamp attached to the parcel, which says ‘If HMRC won’t tax you, I will’.
The campaign hopes to attract thousands of supporters who will do the same as a form of protest. The retail firm paid just £11.9m in corporation tax in 2014, despite making £5.3bn in sales.
“If HMRC can’t tax Amazon then I’m going to and I’ve found a way of doing that. In effect, the cost of that transaction to Amazon is equivalent of them paying a tax to me.
“I’m hoping that everybody will engage in this as it will send a message to the boardroom of Amazon which says ‘you may be able to screw over HMRC, but the British public will not accept your behaviour.'”