Leaked documents indicate Roman Abramovich could face a tax liability of up to £1 billion for failing to pay UK taxes on $6 billion routed through British Virgin Islands companies. The scheme reportedly involved strategic management from the UK, which could implicate him further in tax violations. Calls for an investigation intensify as the funds remain tied to his former club, Chelsea FC.
£1bn Tax Bill Looms for Roman Abramovich Over Hedge Fund Maneuverings
£1bn Tax Bill Looms for Roman Abramovich Over Hedge Fund Maneuverings
Investigations suggest Russian oligarch Roman Abramovich may owe the UK significant taxes linked to a controversial hedge fund investment scheme that financed Chelsea FC.
Amid rising scrutiny, it has been revealed that sanctioned Russian oligarch Roman Abramovich may owe the UK government up to £1 billion in taxes as a result of alleged manipulations surrounding a hedge fund investment scheme. According to leaked documents reviewed by the BBC, Abramovich’s investments, reportedly totaling $6 billion (£4.7 billion), were organized through companies based in the British Virgin Islands (BVI). However, evidence suggests that these investments were effectively managed from the UK, which legally obligates them to pay UK taxes.
The investigation, led by the BBC and the Bureau of Investigative Journalism (TBIJ), indicates that funds from this scheme directly supported Chelsea FC during Abramovich’s ownership. His legal representatives maintain that he sought and adhered to independent professional tax advice, denying any personal involvement in tax evasion.
Labour MP Joe Powell, who advocates for fair taxation, has urged HM Revenue and Customs (HMRC) to probe into the matter, emphasizing that the potential recovery of funds could significantly benefit public services. Central to the investigation is Eugene Shvidler, a former Chelsea FC director and close associate of Abramovich, who is contesting UK sanctions related to his ties with the oligarch.
The leaked documents suggest Shvidler made key investment decisions while residing in the UK, raising questions about the legitimacy of the tax structure of the BVI companies. Tax experts indicate strong evidence that these decisions could necessitate UK taxation, which the BVI companies would typically avoid.
The controversy follows a larger investigation called “Cyprus Confidential,” which scrutinizes links between prominent Russian figures and offshore financial schemes. As part of the same investigation, the BBC earlier reported on Abramovich's avoidance of millions in VAT concerning his luxury yacht operations.
Should HMRC investigate, experts have projected that Abramovich could face tax liabilities ranging between £500 million and £1 billion, taking into account penalties for late payments. Notably, even after selling Chelsea FC, a portion of the proceeds remains frozen due to disputes over charitable distribution, further complicating matters surrounding his financial dealings.
With ongoing constraints from the UK government on his assets and a clear call for investigation, the revelations surrounding Abramovich’s tax strategies are set against a backdrop of international financial scrutiny and increased pressure for accountability. Meanwhile, British taxpayers await resolution on the potentially significant amounts owed.
