Leaked documents suggest Roman Abramovich's investments routed through the British Virgin Islands, allegedly managed from the UK, could result in a £1 billion tax bill. Key figures in the scheme, including former associates linked to Abramovich's time with Chelsea FC, face scrutiny as HM Revenue and Customs (HMRC) may launch an inquiry into the funds and their uses.
Roman Abramovich Faces Potential £1 Billion Tax Bill Amid Controversial Investment Scheme
Roman Abramovich Faces Potential £1 Billion Tax Bill Amid Controversial Investment Scheme
Investigations reveal the sanctioned Russian oligarch could owe significant funds to the UK government from a tax avoidance scheme tied to Chelsea FC.
Roman Abramovich, the sanctioned Russian oligarch previously associated with Chelsea FC, may owe up to £1 billion to the UK government, stemming from a questionable tax initiative involving his hedge fund investments. Evidence acquired by the BBC highlights a scheme wherein approximately $6 billion (£4.7 billion) was funneled through British Virgin Islands (BVI) companies, but appears to have been managed from the UK, potentially obligating the funds to UK taxation.
During the inquiry, it was revealed that significant funds from Abramovich’s hedge fund operations are believed to trace back to financing Chelsea FC during his ownership. Abramovich's legal representatives argue that he consistently sought independent tax guidance and remained unaware of any tax liabilities.
Joe Powell, a Labour MP advocating for equitable tax practices, has urged HMRC to investigate the matter to reclaim significant funds that could enhance public services in the UK. The allegations are centered around Eugene Shvidler, a former Chelsea director and Abramovich's close associate, who is currently contesting sanctions from the UK government due to his connections to the oligarch.
Key evidence suggests Shvidler, who shifted residence to the USA following the outbreak of the Ukraine conflict, was responsible for critical investment decisions while residing in the UK, which challenges the premise of these firms operating tax-free in the BVI. Shvidler's lawyers maintain that the details presented by the BBC paint an incomplete and misleading portrayal of his business conduct.
The investigation into Abramovich’s hedge fund dealings emerged from a robust data leak, revealing a systematic effort to reinvest untaxed profits back into Chelsea FC. Funds flowed from Abramovich’s affiliated BVI companies to sectors associated with the football club, particularly during its peak success in 2021.
Tax professionals are expressing concerns that if HMRC decides to act, this could lead to a hefty tax recalibration for Abramovich, potentially amounting to over £1 billion when interest and penalties are factored in. The mismanaged funds could even eclipse the £653 million tax surcharge previously imposed on F1 executive Bernie Ecclestone.
Following the sale of Chelsea FC, which was conditioned upon a £2.5 billion donation to charities aiding victims of the Ukraine war, the money currently resides in a frozen account pending disputes over its deployment. Sources indicate that the standoff largely revolves around differing opinions on which victims should be prioritized.
As the investigation unfolds, citizens await clarity surrounding Abramovich’s financial obligations and the impact on broader UK tax revenues. The ongoing probe into the financial dealings of those tied to Russia’s regime reveals a deeply complicated network affecting multiple economic fronts.
