Roman Abramovich tax dodge should be probed, HMRC urged

Sanctioned Russian oligarch Roman Abramovich should be investigated over the £1bn he may owe, a bunch of MPs has urged HMRC.

In a letter to the tax authority, Joe Powell, a Labour MP who leads a Parliamentary group on truthful taxation, refers to PJDM studies elevating questions on whether or not tax is due on offshore investments.

“Correct investigation of those issues is crucial,” the letter mentioned. HMRC mentioned it was “dedicated to making sure everybody pays the best tax beneath the legislation, no matter wealth or standing”.

Mr Abramovich’s legal professionals have instructed the PJDM he “at all times obtained unbiased skilled skilled tax and authorized recommendation” and “acted in accordance with that recommendation”.

Leaked papers reveal investments from Mr Abramovich value $6bn (£4.7bn) have been routed by corporations within the British Virgin Islands (BVI), however proof seen by the PJDM suggests they have been managed from the UK, so ought to have been taxed there.

The PJDM and the Bureau of Investigative Journalism have been analyzing the papers for over a yr – 1000’s of information and emails from a Cyprus-based firm that administered Mr Abramovich’s world empire.

The PJDM and its media companions, together with The Guardian, have been reporting on the leaked information since 2023 as a part of the Worldwide Consortium of Investigative Journalists’ Cyprus Confidential investigation.

A number of the cash that funded Chelsea FC when Mr Abramovich owned it may be traced again to corporations concerned within the scheme, the PJDM and its companions additionally discovered.

Mr Powell’s letter mentioned these findings elevate “severe questions on Mr Abramovich’s potential tax liabilities”

It known as on HMRC “to analyze and, if acceptable, to reclaim any funds probably owed by Roman Abramovich to the UK tax authorities” in reference to the findings from the PJDM, TBIJ, and The Guardian.

“Given the dimensions of the sums concerned, making certain that any unpaid taxes are recovered is a matter of public curiosity—notably at a time when funds are urgently wanted for public providers and to handle the nationwide debt,” the letter added.

A HMRC spokesperson mentioned it was “persevering with to guide worldwide efforts to enhance world transparency”.

It’s not uncommon for companies to legally keep away from paying tax on their earnings by making their investments from corporations in tax havens. However the corporations concerned should be managed and managed offshore the place they’re integrated.

If an offshore firm’s strategic choices are being taken by somebody within the UK, its earnings could possibly be taxed as if it have been a UK firm.

The leaked paperwork seen by the PJDM present how the administrators of the BVI funding corporations handed sweeping powers over them to a buddy of Mr Abramovich, Eugene Shvidler, who was residing within the UK and gained British citizenship in 2010.

The PJDM has seen “basic energy of lawyer” paperwork dated between 2004 and 2008, that gave him the “broadest attainable powers” and “full energy to do all the pieces and something” to funding corporations within the BVI.

Attorneys for Mr Shvidler mentioned the PJDM was basing its reporting on “confidential enterprise paperwork that current an incomplete image” and had “drawn robust and misguided conclusions as to Mr Shvidler’s conduct”.

They mentioned “the construction of investments” was “the topic of very cautious and detailed tax planning, undertaken and suggested on by main tax advisors”.

Cyprus Confidential is worldwide collaborative investigation launched in 2023 led by the Worldwide Consortium of Investigative Journalists (ICIJ) into Cyprus corporations supplied company and monetary providers to associates of Russian President Vladimir Putin’s regime, based mostly on paperwork from a company service supplier initially obtained by the whistleblowing group Distributed Denial of Secrets and techniques.

Media companions embrace The Guardian, the investigative newsroom Paper Path Media, the Italian newspaper L’Espresso, the Organised Crime and Corruption Reporting Venture (OCCRP) and the Bureau of Investigative Journalism (TBIJ).

TBIJ reporting workforce: Simon Lock and Eleanor Rose.