Sanctioned Russian oligarch Roman Abramovich could owe the UK up to £1bn due to an alleged attempt to avoid tax on hedge fund investments, according to evidence reviewed by the BBC.
Leaked Papers Reveal Tax Discrepancy
Leaked documents indicate that investments worth $6bn (£4.7bn) were routed through companies in the British Virgin Islands (BVI). However, evidence suggests they were managed from the UK, meaning they should have been taxed under UK regulations.
Investigations by the BBC and the Bureau of Investigative Journalism (TBIJ) further traced some of this money to companies linked to Chelsea FC when Abramovich owned the club.
The oligarch’s legal team stated that he “always obtained independent expert professional tax and legal advice” and “acted in accordance with that advice.” They deny any personal knowledge or responsibility for unpaid tax.
Calls for Investigation
Joe Powell, a Labour MP leading a parliamentary group on fair taxation, has urged HM Revenue and Customs (HMRC) to “urgently” investigate the matter. He emphasized that recovering these “very significant amounts of money” could bolster public services.
Eugene Shvidler’s Role in the Scheme
Central to the alleged tax avoidance scheme is Eugene Shvidler, a former Chelsea FC director and billionaire businessman. Shvidler, who has close ties to Abramovich, is currently contesting UK government sanctions against him.
Shvidler relocated to the USA following Russia’s invasion of Ukraine but had resided in the UK from 2004 to 2022, with properties in London and Surrey.
A tax expert told the BBC that Shvidler’s alleged decision-making on these investments while based in the UK constitutes a “pretty big smoking gun,” suggesting the companies should have been liable for UK taxation.
Shvidler’s lawyers countered that the BBC’s reporting is based on “confidential business documents that present an incomplete picture” and argued that “strong and erroneous conclusions” had been drawn about his conduct.
Inside Abramovich’s Hedge Fund Network
The BBC and its media partners, including The Guardian, have been examining leaked files as part of the International Consortium of Investigative Journalists’ Cyprus Confidential investigation.
Documents indicate that Abramovich invested a significant portion of his 1990s wealth—accumulated through a controversial deal—into Keygrove Holdings Ltd, a BVI-based company. This network of offshore firms reportedly invested up to $6bn (£4.8bn) into Western hedge funds between the late 1990s and early 2020s.
These investments generated an estimated $3.8bn (£3.1bn) in profits over two decades. By utilizing BVI-based companies, where corporate profits are not taxed, the scheme seemingly aimed to minimize tax liabilities.
Shvidler’s Authority Over Investments
Leaked documents reveal that Shvidler was granted sweeping authority over the BVI investment firms while living in the UK. Between 2004 and 2008, he was given “full power to do everything and anything” regarding investment decisions.
By 2008, he gained further control over Keygrove’s investments through Millennium Capital Ventures Ltd, a firm indirectly owned by his wife. This company was responsible for supervising and directing asset investments “without prior consultation.”
Strong Evidence of UK-Based Management
Further evidence emerged in a 2023 US Securities and Exchange Commission (SEC) case against New York firm Concord Management.
The SEC filing identified “Person B,” a “longtime close associate” of Abramovich, who “made investment decisions” for his BVI companies. Through document analysis, the BBC identified “Person B” as Eugene Shvidler.
Tax expert Rita de la Feria told the BBC that if a UK resident such as Shvidler made “strategic big decisions” on hedge fund investments, this is a “clear indication” the profits should have been taxed in the UK.
Shvidler’s legal team insists there is “no question” of him “knowingly or negligently” engaging in unlawful tax avoidance.
Chelsea FC’s Connection to the Funds
The leaked data also reveals how profits from Abramovich’s hedge fund investments eventually flowed into Chelsea FC. The funds traveled through a network of offshore companies before reaching Camberley International Investments Ltd, the entity used to finance the club.
By 2021, when Chelsea won multiple titles—including the Champions League—hundreds of millions of dollars in loans to the club could be traced back to these untaxed investments.
Calculating Abramovich’s Potential Tax Bill
The BBC’s analysis suggests that the investment companies in the BVI generated $3.8bn (£3.1bn) in profits from 1999 to 2018. Applying historical UK corporation tax rates, the estimated unpaid tax amounts to over £500m.
However, with late payment interest and penalties, the total tax bill could rise to between £700m and £1bn.
While HMRC investigations typically cover a maximum of 20 years, the BBC’s calculations are considered conservative, as they apply the lowest historical tax rates and may not account for all withdrawn profits.
If pursued, this could result in one of the UK’s largest tax settlements, surpassing the £653m bill imposed on Formula One boss Bernie Ecclestone in 2023.
Frozen Chelsea Sale Funds
Following Russia’s full-scale invasion of Ukraine, the UK government allowed Abramovich to sell Chelsea FC to Todd Boehly, with a condition that £2.5bn from the sale proceeds be donated to charities supporting Ukraine war victims.
Three years on, the funds remain frozen in a Barclays bank account due to disputes over their allocation. Abramovich reportedly wants the money to assist “all victims” of the war, while the UK government insists it be used exclusively for humanitarian aid in Ukraine.
As Ukrainians await funds from the former Chelsea owner, the BBC’s investigation suggests the British taxpayer might also be owed a significant sum.
