MPs call for investigation into Abramovich’s tax bill

MPs have called on the UK government to open an investigation into the unpaid taxes of Roman Abramovich following this week’s revelations by TBIJ.

Our joint investigation with the BBC and the Guardian revealed that the Russian oligarch may owe over £1bn in tax to the UK due to the nature of his vast offshore hedge fund operation.

On Thursday Joe Powell, Labour MP for Kensington & Bayswater, asked the House of Commons whether HMRC would investigate.

“Yesterday, former constituent of Kensington & Bayswater Roman Abramovich was reported to owe up to a billion pounds in UK tax, potentially a bigger case even than Bernie Ecclestone,” said Powell.

“Does my right honourable friend [leader of the House of Commons Lucy Powell] share the country’s anger at people like Roman Abramovich using complex offshore structures and British overseas territories to dodge tax while they pay their fair share?”

“Will she ensure that time is made to scrutinise whether HMRC have all the resources they need to pursue this case and recover as much money as possible for the Treasury?”

Responding on behalf of the government, Lucy Powell said she was unable to comment on individual cases. She did however emphasise the government’s commitment to reducing the tax gap – the difference between what is collected and what is supposedly due.

Joe Powell also wrote to HMRC in his capacity as chair of the all-party parliamentary group for anti-corruption and responsible tax, which consists of over 40 MPs and members of the House of Lords.

His letter, addressed to HMRC chief Jim Harra, called for further investigation into Abramovich’s tax bill. It also asked whether the Russian’s £3.2bn in frozen UK assets could be used against any potential money owed.

Former Conservative leader Iain Duncan Smith submitted a written question to Parliament on the same subject. He asked the chancellor of the exchequer, Rachel Reeves, if she would be taking steps to “ensure that funds potentially owed by Roman Abramovich to HMRC are (a) investigated and (b) reclaimed.” The Treasury has until Monday to respond.

This week, TBIJ revealed how leaked documents appeared to show that Abramovich’s huge hedge fund investments, which were structured through a series of British Virgin Island companies, were being controlled from the UK by his associate Eugene Shvidler. UK law states that a company is deemed tax resident based on where the business decisions take place, regardless of where it’s registered.

HMRC has not commented on Abramovich specifically, saying only that it is “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”.

Representatives for both Abramovich and Shvidler have denied any alleged wrongdoing to evade or avoid taxes. They said they obtained independent professional tax and legal advice and acted in accordance with it.

Politicians in the UK are not the only ones to have called for further scrutiny of Abramovich’s tax affairs.

In Cyprus, House of Representatives member Alexandra Attalides asked the government to confirm whether Blue Ocean Yacht Management, a company owned by Abramovich until it was dissolved, had repaid the €14m it was found liable for by Cypriot courts.

Another joint investigation this week by TBIJ revealed how Abramovich had used the company, along with a network of offshore entities, as part of a sham scheme to evade millions of euros in VAT.

Blue Ocean had appealed various legal claims made against it, but ultimately did not appear at its own appeal to the supreme court in Cyprus last year, and was dissolved only a few months later.

Abramovich also denied any wrongdoing in connection with the VAT scheme.