Prince Charles' tax affairs under scrutiny

The House of Commons' Public Accounts Committee wants to find out why the prince's estate does not pay corporation tax

British MPs today began examining the tax affairs of Prince Charles and his hereditary estate, the Duchy of Cornwall, here.

The House of Commons' Public Accounts Committee (PAC), which has previously pulled up global corporations such as Starbucks and Google for their dubious tax practices, wants to find out why the prince's estate does not pay corporation tax or capital gains tax.

Prince Charles's most senior official, William Nye, has been called to give evidence before the PAC.

It is the second time that Britain's royal accounts have been examined this way.

The last time Prince Charles' representatives came before the PAC, they were accused of performing financial 'jiggery pokery'.

The Duchy of Cornwall provides the heir to Britain's throne with a private income.

Royal officials argue the duchy is a private landed estate, not a corporation or a public body, so it is exempt from capital gains tax.

They also say the Prince of Wales pays income tax on the money he receives from the hereditary estate after business expenses have been deducted.

'Everyone has a moral obligation to pay a fair rate of tax, whether that's Starbucks, Google or the heir to the throne. We welcome the PAC investigation and hope that this exposure of the duchy's tax arrangements will force the government to act,' said Graham Smith, chief executive of the anti-monarchy group Republic.

The duchy is a 762-million British pounds estate of about 131,000 acres, mostly in the south-west of England, from which the prince received a record 19 million British pounds last year.

Clarence House has said public funding for the Prince of Wales fell by 1-1.2 million British pounds in the last financial year, out of a total income of 20.2 million British pounds.