Roman Abramovich tax dodge must be probed, HMRC urged

Members of the UK Parliament have urged HM Revenue & Customs (HMRC) to investigate sanctioned Russian oligarch Roman Abramovich over potentially unpaid taxes of up to £1 billion. A letter to the tax authority, written by Labour MP and chair of the Fair Tax Parliamentary Group, Joe Powell, cited BBC reports that raised questions about whether offshore investments should have been taxed.

The letter emphasized that "it is essential that these matters are properly investigated." HMRC responded that they are "committed to making sure that everyone pays the tax they owe, regardless of their wealth or status." Abramovich’s lawyers told the BBC that he had “always obtained independent expert tax and legal advice” and “acted in accordance with that advice.”

Leaked documents show that Abramovich’s $6 billion (£4.7 billion) investments were routed through companies in the British Virgin Islands (BVI). However, evidence obtained by the BBC suggests that these investments were actually managed from the UK and should therefore have been taxed in the UK. The BBC and The Bureau of Investigative Journalism have been examining the documents for more than a year, which include thousands of files and emails from a Cyprus-based firm that manages Abramovich’s global empire.

Since 2023, the BBC and its media partners, including The Guardian, have been reporting on these leaked documents as part of the International Consortium of Investigative Journalists (ICIJ) "Cyprus Confidential" investigation. The BBC and its partners also found that some funds when Abramovich owned Chelsea Football Club could be traced back to companies involved in the scheme. Powell stated in his letter that these findings raise "serious questions about Mr Abramovich’s potential tax liabilities."

The letter calls on HMRC to "investigate and, where appropriate, recover any funds that Roman Abramovich may owe to the UK tax authorities," referring to the findings of the BBC, TBIJ, and The Guardian. It added, "Given the scale of the sums involved, it is in the public interest to ensure that any unpaid taxes are recovered, especially at a time when public services are in desperate need of funding and managing national debt." A spokesperson for HMRC said they were "continuing to lead international efforts to increase global transparency."

It is not uncommon for businesses to legally avoid paying tax on profits by investing through companies set up in tax havens. However, the companies involved must be managed and controlled offshore in their place of registration. If the strategic decisions of an offshore company are made by people within the UK, then its profits may be taxed as if they were profits of a UK company. Documents leaked to the BBC showed that the directors of the BVI investment companies gave broad powers to Abramovich’s friend, Eugene Shvidler, who lives in the UK and obtained British citizenship in 2010.

“General Power of Attorney” documents seen by the BBC, dated between 2004 and 2008, show that Shvidler was granted “the widest powers” and “full authority to do anything” with the BVI investment companies. Shvidler’s lawyers said the BBC’s reporting was based on “incomplete confidential business documents” and “drew strong and incorrect conclusions about Mr Shvidler’s actions.” They stated that the “investment structure” was “the subject of very careful and detailed tax planning, carried out and advised on by leading tax advisors.”

"Cyprus Confidential" is an international collaborative investigation launched in 2023 by the International Consortium of Investigative Journalists (ICIJ), investigating the corporate and financial services provided by Cypriot firms to associates of Russian President Vladimir Putin’s regime, based on documents from a corporate service provider originally obtained by the whistleblower organization Distributed Denial of Secrets. Media partners include The Guardian, investigative newsroom Paper Trail Media, Italian newspaper L'Espresso, the Organized Crime and Corruption Reporting Project (OCCRP), and The Bureau of Investigative Journalism (TBIJ). TBIJ's reporting team included Simon Lock and Eleanor Rose.