Report Published on Prince Charles's Tax Affairs
The tax status of Prince Charles's private estate the Duchy of Cornwall was the subject of much scrutiny over the summer with the Prince's advisers facing the wrath of MPs who more or less accused the Prince of dodging corporation tax, but a report issued today by the Public Accounts Committee has broadly acquitted the Duchy of those charges.
However the report says that the Treasury should investigate whether the special tax status of the Prince of Wales’s estate has "an adverse impact" on competitors, the report said. It also criticised the lack of official scrutiny of the Duchy's account.
The Public Accounts Committee said there was “no clear understanding” whether the estate’s exemption from corporation and capital gains tax creates an "unlevel playing field" for competing businesses.
The Rt Hon Margaret Hodge MP, Chair of the Committee of Public Accounts, today said: “The Duchy of Cornwall performed well in 2012-13, increasing its total income and producing an overall surplus of £19.1 million.
“However, there are a number of steps that could help to bring the Duchy, an historic institution, more in line with the expectations of the present day.
“The Treasury does not do enough to properly scrutinise the Duchy’s finances. It relies on the Duchy to provide it with accurate information without carrying out its own independent checks.
In a hearing in July, the MPs were told that the income tax voluntarily paid by the Prince of Wales was “not so very different” from the corporate tax and dividend tax that would be paid if the Duchy were a company. They were also told that many property companies also paid little corporation tax under the rules for real estate investment trusts.
The PAC report also called on the Treasury to do more to scrutinise the Duchy’s financial strategy and for greater transparency over the Prince of Wales’s tax returns, which currently report income tax and VAT as a combined total.