Roman Abramovich’s tax affairs must be investigated, MPs say

The government and HM Revenue and Customs should urgently examine whether Roman Abramovich owes British tax authorities up to £1bn, more than 40 MPs and peers have said, after an investigation by the Guardian and media partners found that his companies may have failed to pay tax on profits from an elaborate offshore investment scheme.

The intervention, from both Conservative and Labour MPs, comes after leaked papers and court filings shed new light on how the income from a $6bn (£4.8bn) cash pile amassed by the former Chelsea FC owner was managed.

Analysis, which was reviewed by experts, suggests his overseas investment companies failed to pay corporation tax and could be liable for up to £1bn including interest and late payment penalties.

If HMRC determined that such a sum were due, it would outstrip the record £652m paid by the former Formula One boss Bernie Ecclestone to settle a tax case in October 2023.

On Thursday, 43 MPs and peers who are members of a all-party parliamentary group examining responsible tax wrote to HMRC, calling on the tax authority to review the investigation’s findings and determine whether it could “reclaim any funds potentially owed by Roman Abramovich to the UK tax authorities”.

They also called for an update on the status of Abramovich’s UK assets, after he was placed under sanctions by the government in response to Russia’s invasion of Ukraine. In its sanctions notice, the Foreign Office said the former Chelsea FC owner was “involved in obtaining a benefit from or supporting the government of Russia”.

The APPG’s chair, Joe Powell MP, wrote: “It has also been reported that Abramovich has at least £3.2bn of UK assets frozen. I would like to ask whether the department has made any considerations as to whether such assets could be used against any potential money owed.

“When Abramovich was forced to sell the Chelsea Football Club, approximately £2.5bn was pledged to humanitarian programmes for victims of the Ukraine war. However, to date, not a single penny of that money has been spent.

“In light of these concerns, it is critical that we understand what measures HMRC is taking to investigate this matter and ensure that any unpaid taxes are recovered. Given the scale of the sums involved, ensuring that any unpaid taxes are recovered is a matter of public interest, particularly at a time when funds are urgently needed for public services and to manage the national debt.”

A spokesperson for HMRC said: “We’re continuing to lead international efforts to improve global transparency and are committed to ensuring everyone pays the right tax under the law, regardless of wealth or status.”

Powell, who is Labour’s MP for Kensington & Bayswater, also raised the issue during questions to the leader of the house, Lucy Powell, on Thursday, asking the government to “scrutinise whether HMRC have all the resources they need to pursue this case and recover as much money as possible for the Treasury”.

Powell said: “He’s absolutely right to raise matters of tax evasion, tax avoidance and in some cases ... industrial scale tax avoidance like the one he’s raised. Obviously, I’m not going to get into individual cases but the gap is still too wide and it was a staggering £36bn just a few years ago.”

She said the government was recruiting 5,000 new compliance officers to close a £36bn gap between duty that is owed and what is actually paid.

In a separate, written question to the Treasury, the former Conservative party leader Iain Duncan Smith asked if Rachel Reeves would “take steps to ensure that funds potentially owed by Roman Abramovich to HMRC are (a) investigated and (b) reclaimed”.

The Guardian has asked the Treasury for comment.

Another APPG member, Phil Brickell, is expected to table a question to the Foreign Office about whether it has discussed the case with counterparts in Cyprus, the Guardian understands.

A joint investigation by the Guardian, the Bureau of Investigative Journalism and the BBC revealed that Abramovich invested in more than 200 hedge funds, using a circuitous structure routed through Cyprus and the British Virgin Islands.

Investments appear to have been controlled from the UK by Abramovich’s “right-hand man”, Eugene Shvidler, the files suggest. Experts said this raised questions about whether corporation tax should have been paid in Britain.

Details of Roman Abramovich’s hedge fund investments emerged as part of the Cyprus Confidential series, based on the largest ever leak of financial information from the Mediterranean tax haven, which the Guardian and its reporting partners have been examining since 2022.

On Tuesday, the investigation also revealed details of a scheme that suggest tens of millions in VAT was avoided on the cost of running Abramovich’s fleet of superyachts, in Italy, Cyprus and a number of other EU countries.

Earlier this week, the Cypriot MP Alexandra Attalides asked her government whether Blue Ocean Yacht Management, the company at the centre of the scheme, had paid any debts that might be due to the state and, if not, what steps the authorities had taken.