Sanctioned Russian billionaire, Roman Abramovich, could owe the UK Treasury as much as £1 billion due to a suspected tax avoidance scheme connected to hedge fund investments, according to findings by the BBC and the Bureau of Investigative Journalism (TBIJ). The investigation is based on leaked documents suggesting that significant funds routed via British Virgin Islands (BVI) companies were actually managed from the UK, indicating potential tax obligations in the latter.
Details from the data leak indicate that investments totaling $6 billion were channeled through BVI companies, leading to claims that Abramovich benefitted from these untaxed profits to finance Chelsea FC during his ownership. His representatives assert that the oligarch acquired thorough legal and tax advice regarding his affairs and denies any wrongdoing or knowledge of unpaid taxes.
Concerns regarding the non-compliance with UK tax laws center on Eugene Shvidler, a former director of Chelsea FC, who played a pivotal role in these financial maneuvers. The shadow of sanctions against him, following Russia’s invasion of Ukraine, has raised further scrutiny on his activities while residing in the UK.
A tax expert noted that substantial evidence indicates Shvidler made significant investment decisions whilst in the UK, challenging the validity of the tax structures employed. The confidential nature of the documents under review has led Shvidler's representatives to caution against premature conclusions regarding his conduct.
The investigation's findings, which are part of the wider "Cyprus Confidential" initiative examining links between Russian oligarchs and offshore financial networks, have implications for the British government as it seeks to recover possible unpaid taxes. Labour MP Joe Powell is urging HM Revenue and Customs to take immediate action to reclaim funds that could support public services.
Estimations suggest that the total tax liability could range between £700 million to over £1 billion, depending on the investigation's conclusions. Meanwhile, amidst discussions over the proceeds from the sale of Chelsea FC, a substantial £2.5 billion remains frozen in a Barclays account due to disagreements over its distribution towards humanitarian aid.
The findings pose serious questions about the financial activities of wealthy individuals in the UK and their compliance with tax regulations, shedding light on broader issues regarding tax avoidance strategies utilized globally.
