Sanctioned Russian oligarch Roman Abramovich could potentially owe the UK up to £1bn following an unsuccessful attempt to evade tax on hedge fund investments, as suggested by evidence reviewed by the BBC.
Leaked documents disclose that investments totaling $6bn (£4.7bn) were funneled through companies in the British Virgin Islands (BVI), but indications show they were managed from the UK and should have been subject to taxation there.
It has come to light that funds used to support Chelsea FC during Abramovich's ownership can be traced back to companies involved in this scheme, as revealed by the BBC and the Bureau of Investigative Journalism (TBIJ).
In response to these findings, Abramovich's legal representatives stated that he always sought professional tax and legal advice and acted in accordance with that counsel. Despite residing between Istanbul, Tel Aviv, and Sochi in Russia, Abramovich denies any awareness or personal accountability for any unpaid taxes.
Joe Powell, a Labour MP leading a Parliamentary group on fair taxation, has urged HM Revenue and Customs to swiftly investigate the matter to potentially recover significant amounts that could be allocated to public services.
The scheme's core figure, Eugene Shvidler, formerly a director at Chelsea FC and a billionaire in his own right, is contesting the UK government's sanctions for his close ties to Abramovich.
The involvement of British Virgin Islands companies connected to Keygrove in Abramovich's hedge fund ventures was revealed through a massive data leak that has been under scrutiny by the BBC and the Bureau of Investigative Journalism for over a year.
The structured investments enabled Abramovich to amass an estimated $3.8bn (£3.1bn) in profits over close to two decades by minimizing tax payments through BVI's tax-free corporate environment.
While legal tax avoidance through overseas companies is common, the key for compliance is that such entities must be operated and managed from the jurisdiction they are incorporated in.
The leaked documents indicate that Shvidler, based in the UK at the time, had been actively involved in strategic decision-making for these investments, signaling a potential tax liability in the UK.
It is suggested that the untaxed profits from Abramovich's hedge fund dealings flowed through his network of companies before eventually reaching Chelsea FC. These financial channels underline the complex web devised to minimize tax obligations.
With complexities surrounding the case, including late payment interests and possible penalties, the total amount owed by Abramovich or the involved companies to HMRC could range from nearly £700m to over £1bn.
Subsequent to the sale of Chelsea FC following Russia's invasion of Ukraine, the £2.5bn proceeds earmarked for charity aid remain in a frozen account, subject to a disagreement on the allocation, posing a parallel to the wait for resolution by both Ukrainian war victims and British taxpayers.