GRIMSBY MP Austin Mitchell has accused Prince Charles of paying a lower tax rate than his servants.
The labour MP claimed the Prince of Wales of 'dodging around' to avoid tax by refusing to classify the Duchy of Cornwall property empire as a corporation – meaning he does not pay corporation tax like other big profit-making firms.
Mr Mitchell also criticised the Prince for not paying enough income tax on the £19million he made from the duchy last year.
He said Charles paid 23.6 per cent of his income in direct and indirect tax – compared with an average of 38 per cent paid by the poorest quarter of the population.
His accusations, in which he describes the Duchy of Cornwall as a 'medieval anomaly' have hit the national press, and he suggested the only reason it was not registered as a company was so the Prince could avoid tax.
Committee member Mr Mitchell reportedly said: 'It looks to me that Prince Charles pays a smaller proportion in tax than any of his domestic servants.'
Charles's principal private secretary, William Nye insisted he actually paid the top rate of income tax, but because he counts the cost of his official duties as a business expense against his tax bill, he appears to pay less tax.
The MPs also criticised Prince Charles for:
Renting his Highgrove residence from himself, then claiming some of this money back as an expense so he can pay less tax;
Enjoying an unfair commercial advantage for his business interests because the duchy does not pay corporation tax; and
Using the proceeds of one of his own charities to spend on the Isles of Scilly, where he has a commercial interest because he owns the freehold.
Set up in 1337, The Duchy of Cornwall, enables the heir to the throne to have a separate income from the monarch, which means he is exempt from corporation tax. Although, he does pay income tax.
His tax bill during the last financial year was £4.4million, less than a quarter of his £19million income.
Quoting from the Duchy's annual report, Mr Mitchell reportedly said: 'Prince Charles's direct tax plus indirect tax is 24 per cent of his income for 2012 and 23.6 per cent for 2013. The bottom quartile of households pay direct and indirect taxes as a percentage of income of 38 per cent and the top quartile pay 33.7 per cent.'
Mr Nye said the amount of tax Charles paid was so low because of the high level of his 'official expenditure' racked up when he represents the Queen. This is set against his tax bill.
He added: 'The Prince of Wales paid last year at 50 per cent, this year at 45 per cent. He pays income tax on his income after relevant business expenses.
'It's been that way since the Prince of Wales and the Queen first started paying income tax 20 years ago, so his official expenditure, which he chooses to use his private income to meet, is the equivalent of business expenses for someone else who has a business.
'Those costs are before tax and he pays income tax on the amount after those official expenses.
But Mr Mitchell said of the duchy: 'You are really dodging around because for tax purposes it's not a corporation but for every other purpose it is a corporation.'
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The labour MP claimed the Prince of Wales of 'dodging around' to avoid tax by refusing to classify the Duchy of Cornwall property empire as a corporation – meaning he does not pay corporation tax like other big profit-making firms.
Mr Mitchell also criticised the Prince for not paying enough income tax on the £19million he made from the duchy last year.
He said Charles paid 23.6 per cent of his income in direct and indirect tax – compared with an average of 38 per cent paid by the poorest quarter of the population.
His accusations, in which he describes the Duchy of Cornwall as a 'medieval anomaly' have hit the national press, and he suggested the only reason it was not registered as a company was so the Prince could avoid tax.
Committee member Mr Mitchell reportedly said: 'It looks to me that Prince Charles pays a smaller proportion in tax than any of his domestic servants.'
Charles's principal private secretary, William Nye insisted he actually paid the top rate of income tax, but because he counts the cost of his official duties as a business expense against his tax bill, he appears to pay less tax.
The MPs also criticised Prince Charles for:
Renting his Highgrove residence from himself, then claiming some of this money back as an expense so he can pay less tax;
Enjoying an unfair commercial advantage for his business interests because the duchy does not pay corporation tax; and
Using the proceeds of one of his own charities to spend on the Isles of Scilly, where he has a commercial interest because he owns the freehold.
Set up in 1337, The Duchy of Cornwall, enables the heir to the throne to have a separate income from the monarch, which means he is exempt from corporation tax. Although, he does pay income tax.
His tax bill during the last financial year was £4.4million, less than a quarter of his £19million income.
Quoting from the Duchy's annual report, Mr Mitchell reportedly said: 'Prince Charles's direct tax plus indirect tax is 24 per cent of his income for 2012 and 23.6 per cent for 2013. The bottom quartile of households pay direct and indirect taxes as a percentage of income of 38 per cent and the top quartile pay 33.7 per cent.'
Mr Nye said the amount of tax Charles paid was so low because of the high level of his 'official expenditure' racked up when he represents the Queen. This is set against his tax bill.
He added: 'The Prince of Wales paid last year at 50 per cent, this year at 45 per cent. He pays income tax on his income after relevant business expenses.
'It's been that way since the Prince of Wales and the Queen first started paying income tax 20 years ago, so his official expenditure, which he chooses to use his private income to meet, is the equivalent of business expenses for someone else who has a business.
'Those costs are before tax and he pays income tax on the amount after those official expenses.
But Mr Mitchell said of the duchy: 'You are really dodging around because for tax purposes it's not a corporation but for every other purpose it is a corporation.'
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