Roman Abramovich, ex-owner of Chelsea, could owe UK £1bn in unpaid taxes
Reports suggest that Roman Abramovich, the former owner of Chelsea FC, may have avoided paying as much as £1bn in taxes, with leaked documents revealing the financing structure of the club during his ownership.
Abramovich and his close associate Eugene Shvidler allegedly utilized BVI-based companies to manage a total of £4.7bn in investments directed towards Chelsea FC in 2004. These funds played a crucial role in supporting the club’s transfer dealings and wage expenditures over the years.
The Russian billionaire initially acquired Chelsea from Ken Bates for £140m back in 2003. However, it has come to light that the funds linked to the club’s financing scheme were managed from the UK, potentially making them liable for taxation in the country.
The tax liability associated with this arrangement could add up to around £1bn when considering potential penalties and accrued interest. Shvidler, who resided in the UK, was reportedly in charge of overseeing the day-to-day management of these investments, as detailed in the leaked documents and a filing with the US Securities and Exchange Commission (SEC).
The controversy surrounding Abramovich’s tax affairs came to the forefront following his decision to sell Chelsea in response to the sanctions imposed on Russia following its military intervention in Ukraine. The sale of the club led to Todd Boehly and Behdad Eghbali taking control, initiating a period of significant changes across the playing squad, coaching staff, and boardroom.
MP Joe Powell has called for an investigation by HM Revenue and Customs (HMRC) to address the potential tax evasion issues and recover the owed amounts to support public services. Experts in tax matters believe that Abramovich’s accumulated profits, estimated at £3.1bn, ought to have been subject to UK corporate tax regulations.
The money generated from these untaxed profits was purportedly channeled through Abramovich’s network of BVI companies to underwrite Chelsea FC’s operational activities. Despite the sale of the club, a significant portion of the proceeds, around £2.5bn, remains frozen due to ongoing disputes regarding its distribution.
The revelations underscore the complex financial arrangements employed by Abramovich during his ownership of Chelsea FC, shedding light on potential tax avoidance practices that could lead to substantial liabilities for the billionaire businessman. The implications of this tax controversy may extend further as authorities scrutinize the details of the financing structure and seek to ensure compliance with tax laws and regulations.