Article text:
Former Chelsea FC owner Roman Abramovich may face a staggering tax bill of up to £1 billion due to a controversial scheme potentially aimed at evading taxation on hedge fund investments, according to evidence reviewed by BBC News. Leaked documents indicate that Abramovich's substantial investments, valued at around $6 billion (£4.7 billion), were funneled through firms in the British Virgin Islands (BVI), with management and strategic decisions reportedly made in the UK.
Notably, these funds have been traced back to the financing of Chelsea FC during Abramovich's ownership. Legal representatives for the oligarch assert that he secured expert tax and legal advice throughout his ventures, claiming no awareness or personal accountability regarding any tax owed.
In the midst of this emerging controversy, Joe Powell, a Labour MP chairing a parliamentary group on fair taxation, has urged HM Revenue and Customs (HMRC) to promptly investigate the situation, asserting the potential for considerable funds to be reallocated to public services if collected.
Central to this alleged tax avoidance scheme is Eugene Shvidler, a billionaire and former Chelsea FC director associated closely with Abramovich. Shvidler, having relocated to the USA post-Russia's invasion of Ukraine, was a UK resident from 2004 to 2022, and evidence indicates he made strategic investment decisions from the UK, violating BVI's tax rules.
The BBC has highlighted that Shvidler exercised comprehensive powers over BVI investment companies while residing in the UK, suggesting that these entities should have been paying taxes in the UK. His legal team, however, contends that the reporting is based on incomplete business documents that misrepresent Shvidler's actions, emphasizing that proper tax planning was adhered to.
The leaked documents stem from an extensive investigator project known as "Cyprus Confidential," conducted by the International Consortium of Investigative Journalists and media partners including The Guardian. Findings have corroborated how Abramovich reportedly evaded millions in Value Added Tax (VAT) concerning the operational costs of his yacht fleet.
An analysis of tax liabilities draws a potential figure exceeding £500 million owed to HMRC based on estimated profits accrued by the companies operating in the BVI. Accounting for possible penalties and late payment interest could escalate this amount to a range between £700 million and over £1 billion.
The complexity of the situation is compounded by Abramovich's frozen funds following the sale of Chelsea FC, with £2.5 billion tied in a Barclays account, pending disputes on the appropriate allocation of these proceeds intended for charity aiding victims of the Ukrainian conflict.
In light of this investigation, it appears both the British taxpayer and Ukrainian victims are awaiting answers from Abramovich regarding the vast financial resources at his disposal.
Former Chelsea FC owner Roman Abramovich may face a staggering tax bill of up to £1 billion due to a controversial scheme potentially aimed at evading taxation on hedge fund investments, according to evidence reviewed by BBC News. Leaked documents indicate that Abramovich's substantial investments, valued at around $6 billion (£4.7 billion), were funneled through firms in the British Virgin Islands (BVI), with management and strategic decisions reportedly made in the UK.
Notably, these funds have been traced back to the financing of Chelsea FC during Abramovich's ownership. Legal representatives for the oligarch assert that he secured expert tax and legal advice throughout his ventures, claiming no awareness or personal accountability regarding any tax owed.
In the midst of this emerging controversy, Joe Powell, a Labour MP chairing a parliamentary group on fair taxation, has urged HM Revenue and Customs (HMRC) to promptly investigate the situation, asserting the potential for considerable funds to be reallocated to public services if collected.
Central to this alleged tax avoidance scheme is Eugene Shvidler, a billionaire and former Chelsea FC director associated closely with Abramovich. Shvidler, having relocated to the USA post-Russia's invasion of Ukraine, was a UK resident from 2004 to 2022, and evidence indicates he made strategic investment decisions from the UK, violating BVI's tax rules.
The BBC has highlighted that Shvidler exercised comprehensive powers over BVI investment companies while residing in the UK, suggesting that these entities should have been paying taxes in the UK. His legal team, however, contends that the reporting is based on incomplete business documents that misrepresent Shvidler's actions, emphasizing that proper tax planning was adhered to.
The leaked documents stem from an extensive investigator project known as "Cyprus Confidential," conducted by the International Consortium of Investigative Journalists and media partners including The Guardian. Findings have corroborated how Abramovich reportedly evaded millions in Value Added Tax (VAT) concerning the operational costs of his yacht fleet.
An analysis of tax liabilities draws a potential figure exceeding £500 million owed to HMRC based on estimated profits accrued by the companies operating in the BVI. Accounting for possible penalties and late payment interest could escalate this amount to a range between £700 million and over £1 billion.
The complexity of the situation is compounded by Abramovich's frozen funds following the sale of Chelsea FC, with £2.5 billion tied in a Barclays account, pending disputes on the appropriate allocation of these proceeds intended for charity aiding victims of the Ukrainian conflict.
In light of this investigation, it appears both the British taxpayer and Ukrainian victims are awaiting answers from Abramovich regarding the vast financial resources at his disposal.
