His representatives have been called before the Commons public accounts committee to answer questions about the Duchy of Cornwall’s tax arrangements.
The vast majority of the Prince’s £20?million annual income is generated by the duchy, which owns agricultural, commercial and residential property, predominantly in the South West. But the estate does not pay corporation tax on profits from its rents and commercial activity.
Instead the Prince has chosen to pay income tax on the income generated by the Duchy at the highest rate of 50 per cent, after his official expenses and costs have been taken into account.
Last year his tax bill came to £4.4?million, down slightly on the previous year.
Margaret Hodge, the chairman of the MPs’ committee, said today: “Several members of the public have raised with us their concerns that the Duchy of Cornwall may be engaged in tax avoidance on the basis that it does not pay corporation tax. This is a serious and legitimate question, particularly in the current climate, and one that we are keen to put to representatives of the Duchy.”
The duchy’s representatives answered questions before the committee in 2006, but the issue has become far more controversial since the outcry over Google, Amazon and other big businesses paying little or no corporation tax in Britain.
William Nye, the Prince’s principal private secretary, will face MPs’ questions on July 15. He published the Prince’s annual accounts yesterday. He said: “The Duchy does not pay corporation tax or capital gains tax for the simple reason it is not a corporation. The Prince voluntarily pays income tax at the 50 per cent rate, after his official expenses and costs have been deducted. We will be more than happy to explain this.”
The Prince’s latest accounts showed that his funding from the taxpayer fell by nearly half in the past year. The total he received from the Sovereign Grant and government departments fell by more than £1?million to £1.15?million. The figure is linked to the Crown Estate’s income two years previously.
But the Prince’s income from the Duchy grew by 4 per cent to £19?million, a record. Most of the increase came from rent rises. Reviews take place regularly and “tend to go up in line with the market” said Mr Nye.
The bulk of the Prince’s private income comes from the Duchy, which he also uses for public and charitable work by the Duchess of Cornwall, the Duke and Duchess of Cambridge and Prince Harry. Last year Prince Charles spent more than £1?million on their official duties.
His overall spending in 2012-13 fell by £330,000, in line with the slight fall in his overall income, from £20.24?million to £19.9?million. That was despite one of his busiest years, with 769 official engagements and visits to 100 cities.
The Prince and the Duchess of Cornwall’s personal spending has also fallen, from £2.6?million to £2.45?million. Clarence House officials said they did not comment on his private spending. He helped raise £139?million for 17 charities last year, up by £8?million.
Buckingham Palace accounts showed earlier this week that government spending on the monarchy overall rose by almost £1?million to £33.3?million in the last financial year.
