Roman Abramovich, a sanctioned Russian oligarch and former owner of Chelsea FC, could potentially face a tax bill of up to £1 billion in the UK, according to new evidence from investigations by the BBC and the Bureau of Investigative Journalism (TBIJ). Documents reportedly reveal that $6 billion of his hedge fund investments were funneled through companies based in the British Virgin Islands (BVI) but were managed from the UK, raising questions about tax obligations.
Abramovich's legal team claimed he acted based on independent tax and legal advice and denied any willful wrongdoing. Calls for immediate investigations by HM Revenue and Customs (HMRC) have increased, highlighting the significance of the potential recovery for public services, as noted by Labour MP Joe Powell.
At the core of the tax avoidance scheme is Eugene Shvidler, a billionaire businessman and former Chelsea FC director, who reportedly made key investment decisions while living in the UK. Tax experts suggest that his role in managing the BVI companies could mean significant UK tax liabilities should be owed.
Leaked documents reveal that significant profits from Abramovich's hedge fund investments—estimated at $3.8 billion over two decades—were structured to minimize tax payments. Legal experts argue that if strategic decisions for these investments were indeed made from the UK rather than the BVI, the entities involved could be subjected to UK taxation.
The investigation also uncovered how untaxed profits flowed from Abramovich's investments into a network of his companies, eventually reaching Chelsea FC—indicating ties between his wealth accumulation and the football club's financing.
With recent estimates calculating a potential tax bill ranging between £700 million to over £1 billion, Abramovich's situation is compared to that of prominent businessman Bernie Ecclestone, who faced a £653 million tax bill earlier this year.
Frozen funds stemming from the recent sale of Chelsea FC to Todd Boehly, reportedly totaling £2.5 billion and meant to aid victims of the Ukraine war, linger unresolved in a Barclays bank account amid disputes over fund allocation, further complicating Abramovich's financial scrutiny.
The International Consortium of Investigative Journalists (ICIJ) has led this extensive investigation into corporate financial dealings associated with Abramovich, revealing broader implications of tax avoidance among those connected to the Kremlin.
