Recent investigations reveal that sanctioned Russian oligarch Roman Abramovich might owe up to £1 billion to the UK government following a tax dodging scheme related to his hedge fund investments. Leaked documents examined by the BBC indicate that around $6 billion (£4.7 billion) was funneled through British Virgin Islands (BVI) companies but was managed from the UK, implying a tax obligation there.
The funds are reportedly linked to the financing of Chelsea FC during Abramovich's ownership. His legal representatives assert that he acted on expert tax advice and is not responsible for any unpaid taxes. Labour MP Joe Powell has urged HM Revenue and Customs (HMRC) to investigate and claim the significant sums that could benefit public services.
Key to the alleged tax dodging is Eugene Shvidler, a former director at Chelsea FC. Shvidler has reported his innocence while contesting UK sanctions due to his connection with Abramovich. A tax expert claims there is substantial evidence that Shvidler made critical investment decisions while living in the UK, which could necessitate UK tax payments.
Legal representatives for both Abramovich and Shvidler contend that the allegations misrepresent their business dealings, claiming careful planning and legitimate operations. This comes in the wake of a broader investigation into Abramovich’s financial activities that includes his estate and yacht operations.
The leaked documents suggested a significant portion of Abramovich's wealth gained in the 1990s was invested through Keygrove Holdings Ltd, a BVI firm that managed hedge fund investments. The implications suggest possible tax evasion by not managing the companies where they were incorporated.
The UK government estimates Abramovich could owe between £500 million to over £1 billion, including interest and penalties from undeclared tax liabilities, should an HMRC investigation confirm tax evasion. This potential liability surpasses other prominent tax bills including those of Formula One’s Bernie Ecclestone.
Complications arise as £2.5 billion from the sale of Chelsea FC remains frozen, attributed to ongoing disputes on fund distributions. With investigations ongoing, there’s an uncertain future for both Abramovich's financial obligations and the potential recovery of funds for the British taxpayer, paralleling unresolved charity contributions for Ukrainian war victims stemming from the sale.
As investigative efforts continue under the "Cyprus Confidential" initiative, associated with the International Consortium of Investigative Journalists (ICIJ), the ramifications of Abramovich's tax strategies and business ties with Russian influences remain under scrutiny.
