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Prince Charles reported to the revenue over 'well entrenched tax avoidance scheme' on 18m earnings
12:51 GMT, 15 December 2012
Prince Charles, seen in Tetbury, Gloucestershire, pays income tax on the Duchy
Prince Charles has been reported to the taxman over claims the Duchy of Cornwall is a 'well entrenched tax avoidance scheme'.
Clarence House defended the Prince of Wales' financial arrangements today after an organisation compared the royal to Starbucks and Google, who recently come under the spotlight for their tax arrangements.
Republic, which campaigns for an elected head of state, said it had written to HM Revenue and Customs (HMRC) and Margaret Hodge, chairwoman of the Public Accounts Committee, asking them to investigate the 728 million organisation's tax arrangements.
It claims that an information
commissioner ruling in November last year means the 675-year-old Duchy
is a separate legal entity to the Prince – to whom it paid more than 18
million last year – making it liable for corporation tax.
House disputed this, saying today that the Duchy is a trust set up to
generate income for Princes of Wales and not liable to pay the tax.
Prince voluntarily pays income tax on income generated by the Duchy, so
there is no legal requirement to pay corporation tax and to do so would
result in double taxation,' a spokeswoman said.
The Duchy is the estate given to the heir to the throne.
According to its 2012 accounts, comprises around 53,408 hectares of land in 24 counties, mostly in the south west of England and including the whole of the Isles of Scilly.
It was created in 1337 by Edward III for his son and heir, Prince Edward, the Black Prince, who became the first Duke of Cornwall.
The Duchy of Cornwall consists of over 3,500 individual lettings, including 700 agricultural agreements, 700 residential agreements, and 1,000 commercial agreements
The portfolio consists of property in London, Somerset, Dorset, Wiltshire Gloucestershire, Hereford, Cornwall; and The Isles of Scilly (pictured)
Charles receives the 'revenue surplus' from the estate, and the Duchy's accounts show it grew by 2.8% to 18.3million in the last financial year. Its total worth grew by 32 million to 728 million, due to 'buoyant agricultural property values'.
His tax bill rose marginally from 4,398,000 to 4,496,000, an increase of 98,000.
In November last year, during a row over plans for an oyster farm in an environmentally sensitive area of west Cornwall owned by the Duchy, an information tribunal ruled the Duchy was a public authority and ordered it to divulge environmental data to the public.
Republic said that this ruling made it a 'separate legal entity' liable to the tax.
Republic said that the ruling that decided the Duchy was a public authority made it a 'separate legal entity' liable to the tax
Its chief executive Graham Smith said that the Duchy, like Starbucks and Google, had a 'moral obligation to pay a fair rate of tax'.
Unlike Starbucks Prince Charles doesn't have to create some complex network of overseas companies and offices. He simply insists that he shouldn't have to pay and hides behind his very own onshore tax-haven,' he said.
'The Duchy clearly operates as a separate legal entity. It is only in his possession for as long as he is heir to the throne or as long as parliament allows it.'
'Charles doesn't 'earn' the profit from the Duchy, it isn't money made as the result of his own hard work. And the Duchy cannot claim, as the big corporations do, that it offers a net benefit to the economy. The Duchy is simply a cash cow for the prince and the prince is clearly set on minimising his tax contributions.'
An HMRC spokesman said it does not comment on the affairs of individual taxpayers.