AFTER Monday’s latest tax hearing held by the Public Accounts Committee in which the tax affairs of the Duchy of Cornwall faced scrutiny, I felt the need to sleep on it before writing my usual indignant protestations.
The workings of the comittee have become a circular, exhausting, inane process.
It tends to go something like this: a firm or perceived tax avoider is called before committee, given an ill-informed dressing-down, their arguments are largely ignored and then I write a rather cross blog about it.
Recent headlines of mine include “Profession reaches end of its tether with PAC”, “PAC risks credibility after accusing Big Four of driving tax policy”, and “Suggestion Big Four too close to government peculiar”. There’s quite a strong theme there.
For once, I was initially pleasantly surprised the PAC felt the tax affairs of the Royals warrant investigation. My reasoning for that is because special, bespoke, tax arrangements such as the ones the Royal family and its various estates are subject to should be periodically reviewed.
But once the hearing commenced, my sentiment quickly evaporated as members of the committee demonstrated the same lack of knowledge we’ve seen throughout their tax avoidance investigations.
A basic lack of awareness of the memorandum of understanding between the Duchy and government, the taxation of landed estates and the purpose of the duchy – to provide the heir to the throne a private income – rather drained the committee of credibility.
For clarity’s sake, the duchy is a private estate established in 1337 in order to provide the heir to the throne with a private income, pays no corporation tax or capital gains tax due to a memorandum of understanding on Royal taxation struck between government and the Crown in 1993. I found that out from the internet.
Of course, in general, there’s nothing wrong with not knowing these things, but given the committee’s particular interest – its rather narrower remit notwithstanding – the very least one might expect of it is to be thoroughly briefed.
Repeatedly suggesting the duchy has “all the features of a corporation”, when it’s a private estate suggests that was not the case.
To his credit, the Prince of Wales’s principal private secretary William Nye coolly fielded the committee’s accusations, carefully explaining the various rules, regulations and practices that accompany Charles’s position as duke.
“It is a private landed estate,” Nye said. “He [Charles] manages it and he is responsible for running it. He receives an income but the assets of the estate he has to manage for future generations.”
He did, though, allow more than a hint of cheek to creep in on occasion, such as a couple of blunt ‘nos’ to the questions he felty didn’t deserve a more detailed response.
Calum Fuller is the tax correspondent for Accountancy Age and Financial Director.
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