Revenue promises reform after Allcock guilty verdict

Taxmen will never again be seen in the same light thanks to Michael Allcock – found guilty on Tuesday of 6 out of 11 corruption charges at the Old Bailey.

Gone forever is the traditional, pin-striped, bowler-hatted image. Severely dented is the Revenue’s reputation as fair, honest and trustworthy, though the department has pledged reform in the wake of Allcock’s ‘breathtaking’ corruption.

It has disciplined three staff internally. A spokesman said: ‘We’ve cleared codes of practice for investigations now and we don’t have people travelling abroad at the (investigated) taxpayer’s expense.

‘Our work demands the highest level of integrity. Any member of staff who lapses must be prepared to face the consequences.’

The trial has revealed a worrying picture. Evidence revealed a playboy lifestyle with luxurious trips abroad, casino visits, the services of prostitute Michelle Corrigan and, of course, the money – at least #155,000 in bribes.

Allcock, head of the ‘ghostbuster’ unit Special Compliance Office 2 (SCO), took bribes for favourable tax treatment for foreign nationals he was investigating. Condemned by a majority verdict, he faces a maximum 14 years behind bars.

Co-defendant Hisham Alwan, a Middle East oil consultant, was found guilty of one charge of corruptly offering bribes to Allcock.

Questions about Allcock’s unorthodox methods, intellectual ability or technical knowledge went unanswered for one simple reason – he was raking in a staggering #20m a year in lost tax.

Allcock’s actions infuriated former colleagues and inspectors who left the Revenue for the private sector. Most recall a younger Allcock – brash and bombastic – and maintain a distance from him. They claim the Essex man’s illicit activities reveal serious flaws in procedure.

Levy Gee tax investigations specialist John Gwyer said: ‘There’s a strict rule that you do not accept favours from taxpayers. If you do have something pressed on to you, it should be reported.

‘There’s no Revenue manual giving categorical advice on the matter, it’s passed on orally. There’s a big question mark over the Revenue pending full disclosure of what steps will be taken to make sure there’s no corruption there at the moment. It gives the impression that the Revenue is out of control.’

Price Waterhouse tax investigations partner John Bishton, Allcock’s boss from 1983 to 1985, added: ‘At the Revenue, particularly SCO, we always did deals over grey areas. Who can say what is right or wrong – it’s a question of judgement.

‘It would be unfortunate if the arrangement was curtailed because of Allcock. The alternative is appeals where neither side knows what will happen – the whole system would fall apart.’

Allcock’s defence QC Anthony Arlidge commented on his unconventional collection methods: ‘He dared to go where no taxman had gone before.’

But Arthur Andersen’s head of tax investigations, Bill Docherty, called for a return to higher standards. ‘The Revenue must go back to a traditional investigations approach, away from the edge of the law and police-style methodology of informers and trade-offs.’

But pressure on SCO’s officers will grow. Tax avoidance, evasion and fraud are key targets of both Government and Opposition.

Random audits under self-assessment provide a further opportunity for the Revenue to launch investigations into any taxpayer.

KPMG’s head of tax investigations, Tom Murray, called for external monitoring.

‘Allcock’s trial throws doubt on the TC Coombs precedent that tax inspectors always act reasonably and are to be believed, while the taxpayer has very few rights to challenge the powers which are used against him.

‘The Revenue is expanding its areas of activity and there’s a very reasonable case for the public to be satisfied that this organisation is run properly.’