Abramovich tax dodge must be probed, HMRC urged
Sanctioned Russian oligarch Roman Abramovich must be investigated over the ÂŁ1bn he could owe, a group of MPs has urged HMRC.
In a letter to the tax authority, Joe Powell, a Labour MP who leads a Parliamentary group on fair taxation, refers to BBC reports raising questions about whether tax is due on offshore investments.
âProper investigation of these matters is essential,â the letter said. HMRC said it was âcommitted to ensuring everyone pays the right tax under the law, regardless of wealth or statusâ.
Mr Abramovichâs lawyers have told the BBC he âalways obtained independent expert professional tax and legal adviceâ and âacted in accordance with that adviceâ.
Leaked papers reveal investments from Mr Abramovich worth $6bn (ÂŁ4.7bn) were routed through companies in the British Virgin Islands (BVI), but evidence seen by the BBC suggests they were managed from the UK, so should have been taxed there.
The BBC and the Bureau of Investigative Journalism have been examining the papers for over a year â thousands of files and emails from a Cyprus-based company that administered Mr Abramovichâs global empire.
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 Journalistsâ Cyprus Confidential investigation.
Some of the money that funded Chelsea FC when Mr Abramovich owned it can be traced back to companies involved in the scheme, the BBC and its partners also found.
Mr Powellâs letter said these findings raise âserious questions about Mr Abramovichâs potential tax liabilitiesâ
It called on HMRC âto investigate and, if appropriate, to reclaim any funds potentially owed by Roman Abramovich to the UK tax authoritiesâ in reference to the findings from the BBC, TBIJ, and The Guardian.
âGiven the scale of the sums involved, ensuring that any unpaid taxes are recovered is a matter of public interestâparticularly at a time when funds are urgently needed for public services and to manage the national debt,â the letter added.
A HMRC spokesperson said it was âcontinuing to lead international efforts to improve global transparencyâ.
âBroadest possible powersâ
It is not unusual for businesses to legally avoid paying tax on their profits by making their investments from companies in tax havens. But the companies involved must be managed and controlled offshore where they are incorporated.
If an offshore companyâs strategic decisions are being taken by someone in the UK, its profits could be taxed as if it were a UK company.
The leaked documents seen by the BBC show how the directors of the BVI investment companies handed sweeping powers over them to a friend of Mr Abramovich, Eugene Shvidler, who was living in the UK and gained British citizenship in 2010.
The BBC has seen âgeneral power of attorneyâ documents dated between 2004 and 2008, that gave him the âbroadest possible powersâ and âfull power to do everything and anythingâ to investment companies in the BVI.
Lawyers for Mr Shvidler said the BBC was basing its reporting on âconfidential business documents that present an incomplete pictureâ and had âdrawn strong and erroneous conclusions as to Mr Shvidlerâs conductâ.
They said âthe structure of investmentsâ was âthe subject of very careful and detailed tax planning, undertaken and advised on by leading tax advisorsâ.
Cyprus Confidential is international collaborative investigation launched in 2023 led by the International Consortium of Investigative Journalists (ICIJ) into Cyprus firms provided corporate and financial services to associates of Russian President Vladimir Putinâs regime, based on documents from a corporate service provider originally obtained by the whistleblowing group Distributed Denial of Secrets.
Media partners include The Guardian, the investigative newsroom Paper Trail Media, the Italian newspaper LâEspresso, the Organised Crime and Corruption Reporting Project (OCCRP) and the Bureau of Investigative Journalism (TBIJ).
TBIJ reporting team: Simon Lock and Eleanor Rose.