Roman Abramovich Could Owe UK £1bn In Unpaid Taxes – BBC Reveals.
Sanctioned Russian oligarch Roman Abramovich may owe the UK up to £1 billion in unpaid taxes due to a failed attempt to avoid tax on hedge fund investments, according to evidence obtained by the BBC.
Leaked documents reveal that investments worth approximately $6 billion (£4.7 billion) were funnelled through companies registered in the British Virgin Islands (BVI). However, indications suggest these investments were managed from the UK, meaning they should have been subject to UK taxation.
Investigations by the BBC and the Bureau of Investigative Journalism (TBIJ) found that some of the funds used to support Chelsea FC during Abramovich’s ownership can be traced back to the companies involved in the scheme.
Allegations of Tax Evasion
Abramovich’s legal representatives maintain that he “always obtained independent expert professional tax and legal advice” and “acted in accordance with that advice.” The former Chelsea owner, who reportedly now divides his time between Istanbul, Tel Aviv, and the Russian resort of Sochi, denies any personal knowledge of or responsibility for unpaid taxes.
Labour MP Joe Powell, who chairs a parliamentary group on fair taxation, has urged HM Revenue and Customs (HMRC) to investigate the matter and recover what could be “very significant amounts of money that could be invested in public services.”
Role of Eugene Shvidler
At the centre of the tax avoidance scheme is Eugene Shvidler, a former Chelsea FC director and billionaire businessman, who has close ties to Abramovich. Shvidler, who lived in the UK from 2004 until 2022 before moving to the United States, is currently challenging UK government sanctions against him.
A tax expert consulted by the BBC suggested that evidence showing Shvidler made key strategic investment decisions while residing in the UK was a “pretty big smoking gun,” indicating the companies should have been paying UK taxes.
Shvidler’s legal team responded by claiming that the BBC’s conclusions were based on “confidential business documents that present an incomplete picture” and insisted that the structure of the investments had undergone “very careful and detailed tax planning” advised by top tax professionals.
The Cyprus Confidential Leak
The revelations about Abramovich’s hedge fund investments stem from a large-scale leak of documents from a Cyprus-based company that managed his global financial empire. These files, which the BBC and TBIJ have been analysing for over a year, provide insights into how the oligarch channelled a significant portion of his wealth into a BVI-registered firm called Keygrove Holdings Ltd.
Keygrove Holdings oversaw a network of BVI-based companies that collectively invested up to $6 billion (£4.8 billion) into Western hedge funds between the late 1990s and early 2020s. These investments reportedly generated approximately $3.8 billion (£3.1 billion) in profits.
By structuring the investments through the BVI, which does not impose corporate taxes, the scheme appears to have been designed to minimise tax liabilities. However, tax laws dictate that if an offshore company is effectively managed from the UK, it should be subject to UK tax regulations.
Calls For Investigation
Documents from 2004 to 2008 reveal that Shvidler was granted sweeping control over the BVI investment companies through “general power of attorney” agreements, giving him “full power to do everything and anything” on their behalf. Since he was based in the UK at the time, tax experts argue this could provide strong grounds for HMRC to pursue outstanding tax claims.
The BBC and its media partners, including The Guardian, have been reporting on the leaked files since 2023 as part of the International Consortium of Investigative Journalists’ Cyprus Confidential investigation.
As scrutiny over Abramovich’s financial dealings intensifies, pressure is mounting on UK authorities to investigate and, if necessary, recover substantial sums in unpaid taxes.
Credit: BBC
