Roman Abramovich May Owe UK Government £1 Billion in Tax Following Financial Investigation

Leaked documents suggest that Roman Abramovich, the former owner of Chelsea FC, may owe the UK as much as £1 billion due to an alleged tax evasion scheme involving hedge fund investments routed through the British Virgin Islands, which were actually managed from the UK.

Sanctioned Russian oligarch Roman Abramovich is facing potential liabilities of up to £1 billion owed to the UK in relation to a tax avoidance strategy linked to his hedge fund investments, according to evidence reviewed by the BBC. Leaked documents indicate that approximately $6 billion (£4.7 billion) was funneled through companies in the British Virgin Islands (BVI), yet was managed from the UK, suggesting taxable revenue should have been declared there.

The financial trail connects some of the funds that supported Chelsea FC during Abramovich's tenure to this complex scheme, as reported by the BBC and the Bureau of Investigative Journalism (TBIJ). Abramovich's legal representatives maintain that he acted in accordance with professional tax and legal advice, denying personal responsibility for any unpaid tax obligations.

Joe Powell, a Labour MP who chairs a parliamentary group focused on fair taxation, urged HM Revenue and Customs (HMRC) to quickly examine the matter, emphasizing that recovering such funds could greatly benefit public services. Central to the scheme is Eugene Shvidler, a former Chelsea FC director and a current billionaire businessman, who is contesting UK sanctions imposed due to his connection with Abramovich.

Shvidler, who resided in the UK until 2022, allegedly held significant control over the investments while residing there, leading tax experts to suggest this might constitute a strong case for UK taxation. His legal counsel criticized the reporting, claiming it relied on incomplete documents and that their client's tax strategy was meticulously planned.

This tale emerged from a massive leak of data that has been under scrutiny by the BBC and TBIJ as part of the ongoing Cyprus Confidential investigation by the International Consortium of Investigative Journalists. The revelations draw attention to how significant portions of Abramovich's untaxed investments flowed into Chelsea FC, as loans traced back to the profits were made to a company established to finance the football club.

Potential liabilities could range vastly; depending on penalties and interest imposed by HMRC, Abramovich could owe as little as £700 million or surpass £1 billion. Furthermore, regulatory investigations can only extend back a maximum of 20 years, potentially limiting recovery actions.

Consequent to Russia's invasion of Ukraine, Abramovich's sale of Chelsea FC included a stipulation that £2.5 billion of the proceeds be allocated to charity for Ukrainian war victims, a fund that remains frozen due to disputes over distribution. This unfortunate delay underscores a broader predicament – as Ukrainian victims await aid, so too do UK taxpayers look for restitution as investigations into Abramovich's financial dealings unfold.