Roman Abramovich Faces Potential £1bn Tax Bill Over Hedge Fund Scheme

Evidence suggests Roman Abramovich could owe up to £1 billion in tax related to hedge fund investments managed from the UK, with ties to his Chelsea FC dealings, igniting calls for an official investigation.

Sanctioned Russian oligarch Roman Abramovich could potentially owe the UK up to £1 billion following revelations of a flawed attempt to sidestep taxation on hedge fund investments, according to documents obtained by the BBC. Leaked materials indicate that an estimated $6 billion (£4.7 billion) in investments were funneled through British Virgin Islands (BVI) companies, but evidence suggests that effective management occurred in the UK, thereby making these profits liable for UK taxation.

The financial maneuvers, which provided significant funding for Chelsea FC during Abramovich's ownership, have spurred public officials to demand an inquiry. Labour MP Joe Powell, who advocates for fair taxation, urged HM Revenue and Customs (HMRC) to quickly probe these findings, highlighting the considerable sums involved could significantly benefit public services.

The scheme appears to center around Eugene Shvidler, a billionaire businessman and former Chelsea FC director. Shvidler, who currently resides in the US following Russia's invasion of Ukraine, is contesting sanctions imposed due to his close ties with Abramovich. While both Abramovich's and Shvidler's legal teams emphasize compliance with tax laws, a tax expert noted the weight of evidence indicating that strategic investment decisions were made while Shvidler was in the UK, making it likely the profits should bear the corresponding UK tax liabilities.

The leaked files revealing the extensive financial operations were part of an ongoing investigation into companies that facilitated Abramovich's global empire. This includes insights into how significant profits made through intricate investment strategies may have evaded taxation through careful planning and the use of offshore entities.

The leaked documents have raised crucial questions about the legality of these investments and their management. Legal advisories from within the oligarch's circle claim the reporting is based on incomplete data and improper conclusions.

As public interest grows, attention turns to the £2.5 billion tied up in a frozen bank account following the sale of Chelsea FC, which the British government mandated be donated to victim charities of the Ukraine conflict. Current disputes over fund allocation further complicate the financial picture for both the former club owner and UK authorities.

Overall, this unfolding financial saga underscores the complexities surrounding international investments and the potential consequences for tax compliance amid increasing regulatory scrutiny on oligarchs and their financial practices. The future of these investigations and the exact financial liabilities at play remain uncertain as authorities weigh the evidence and consider action.