Charles quizzed on tax evasion

The chairman of the Public Accounts Committee has written to the Treasury questioning why the Duchies of Cornwall and Lancaster do not pay corporation or capital gains tax.

Tory MP Edward Leigh wanted to know whether there was “anything about the status” of the Duchies which placed them outside the tax regimes.

The letter to Financial Secretary, John Healey, followed a Public Accounts Committee report last year which asked the Treasury to justify the Duchies’ “favourable” tax position.

The report also asked Treasury officials to set out the impact of the situation on the Duchies’ “competitive position in the property and other markets in which they operate”.

Responding to the Treasury’s reply, Mr Leigh wrote again last week: “The committee has considered the Treasury’s response on this point, but to help their understanding Members would welcome a fuller explanation.

“In particular, the committee would welcome the Treasury’s view on whether there is anything about the status of the Duchy of Cornwall and Duchy of Lancaster that puts them outside the regimes for corporation tax and capital gains tax.

“The committee would also like to know whether the commissioners for HM Revenue and Customs have ever made a determination in relation to the Duchy of Cornwall or Duchy of Lancaster.”

In further letters to the Duchies of Cornwall and Lancaster, Mr Leigh said that PAC had a statutory duty to inspect the Duchies’ accounts.

He said there was a “paradoxical situation” in which the accounts were laid before Parliament but the Auditor General, Sir John Bourn, “lacks access to the underlying books and records”.

The Duchy of Cornwall is Prince Charles’ main source of income, while the Duchy of Lancaster provides income for the Queen.

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