Evidence suggests Roman Abramovich routed hedge fund investments to avoid UK taxes, raising concerns about funding for Chelsea FC.
Roman Abramovich Faces £1bn Tax Bill Linked to Chelsea FC Funding
Roman Abramovich Faces £1bn Tax Bill Linked to Chelsea FC Funding
Leaked documents indicate opening for HMRC to recover unpaid taxes from the oligarch.
Sanctioned Russian oligarch Roman Abramovich may owe the UK government up to £1 billion following revelations of potential tax evasion linked to his hedge fund investments. Investigative findings revealed that investments totaling around $6 billion were funneled through British Virgin Islands (BVI) companies, while management decisions appear to have been made from the UK, thus potentially invoking UK tax obligations.
The reports investigated by the BBC and The Bureau of Investigative Journalism indicate a direct connection between the funding of Chelsea FC during Abramovich’s ownership and the offshore investment strategies. Lawyers representing Abramovich stated that he engaged professional tax and legal advice and denied any personal wrongdoing regarding unpaid taxes.
Joe Powell, a Labour MP and advocate for fair taxation, is urging HM Revenue and Customs (HMRC) to conduct an immediate investigation, emphasizing the significant amounts of potential funds which could support public services. The scheme at the center of these allegations involves Eugene Shvidler, a former Chelsea FC director, whose role in managing these investments from the UK raises questions about tax liabilities.
The BBC's examination unfolded amidst a year-long investigation into a massive leak of financial documents revealing details about Abramovich’s complex financial arrangements managed outside of the UK. The leaked data suggests that his hedge fund investments, largely generated by wealth accumulated in the 1990s from controversial dealings, were structured to minimize tax through BVI-based companies.
Tax experts, reviewing the findings, characterized Shvidler’s oversight as a significant indicator that profits derived from UK-based management should be taxable by the UK's HMRC. They noted that the corporate governance structure allowed Shvidler to wield extensive control over the BVI companies while residing in the UK.
Complications have further emerged due to legal challenges against Shvidler over the UK's sanctions regime, following the ongoing geopolitical fallout from the Ukraine conflict, which led to Abramovich’s forced sale of Chelsea FC. Presently, £2.5 billion from the Chelsea sale sits frozen in a bank account as disputes ensue over the allocation of funds aimed at assisting victims of the conflict.
Estimations now suggest that Abramovich’s potential tax bill might eclipse those of other high-profile cases, raising critical conversations about tax avoidance and the use of offshore financial structures. The investigation aligns with broader global scrutiny of financial networks connected to individuals within the Russian elite, directing attention toward the ramifications of such tax schemes for British taxpayers.
