04 Aug 2005
For those delving into the accounts of Prince Charles it should come as no surprise to find that he has hired a tax expert to manage his finances.
Leslie Ferrar, 49, joined Charles’s Duchy of Cornwall in January as Treasurer, precisely as MPs on the Common’s Public Accounts Committee began an investigation into the books and tax status of the heir to the throne’s £505m estate.
The results of this probe, published last week after a series of leaks, will make uncomfortable reading for Ferrar, a former tax partner at KPMG.
The report, based on a series of hearings with Duchy senior staff rather than the usual probe by the National Audit Office, highlights ‘obscurities’ and potential conflicts of interest in the management and governance of its accounts.
It also indicates the level of frustration within parliament that the Prince’s accounts are not open to the public or to the scrutiny of the NAO.
The influential committee has demanded justification as to why the Prince pays voluntary income tax yet his estate is exempt from corporation and capital gains taxes; provoking the wrath of chancellor Gordon Brown.
But while the Treasury and Clarence House continue to tell MPs to ‘mind their own business’, the tax issue will not go away. Committee members argue that such tax breaks are contributing to an 11% growth rate for the Duchy, producer of Duchy Originals food products, and a £13m private income for the Prince. Ferrar’s background will undoubtedly prove crucial over the coming months with the Duchy expected to mount a formal defence to the report in the autumn.
Ferrar is a long-established commentator on employment tax and she now oversees a large section of the Prince’s estate including the accounts, IT, records management, personnel and some financial supervision of Charles’s numerous charities.
Her first months in the job haven’t been without controversy.
Take her treatment of a chef whose impromptu snap of Charles and Camilla ended up being the official engagement photo and found its way into the tabloids.
The Nottingham-born chemistry graduate apparently told the chef that no financial reward would be forthcoming despite the photo being sold worldwide, and she was dubbed the ‘grasping treasurer’.
Having already experienced the media limelight she may find herself thrust forward more regularly, and not just over the Prince’s tax status.
The MP’s were also fiercely critical of the management of the Duchy accounts, arguing that they are unclear and need to be brought more into line with public sector accounting best practice. Some of the anomalies uncovered include the rent paid by the Prince for his Highgrove estate that was simply transferred into another of his accounts.
They also complain of a blurring between the accounting for capital and revenue items and no clear reconciliation between the profit made on the sale of assets and their book value.
The committee wants to ensure that even royalty is not exempt from their scrutiny. Ferrar may find the next few months more than taxing.
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