CLARENCE House has defended the Prince of Wales's financial arrangements after he was reported to authorities over claims the Duchy of Cornwall is a "well entrenched tax avoidance scheme".
Republic, which campaigns for an elected head of state, said it had written to HM Revenue and Customs (HMRC) and Margaret Hodge, chair of the Public Accounts Committee, asking them to investigate the £728 million organisation's tax arrangements.
It claims an information commissioner ruling in November last year means the 675-year-old Duchy is a separate legal entity to the Prince – to whom it paid more than £18 million last year – making it liable for corporation tax. Clarence House disputed this, saying the Duchy is a trust set up to generate income for Princes of Wales and not liable to pay the tax.
A spokesman said: "The Prince voluntarily pays income tax on income generated by the Duchy, so there is no legal requirement to pay corporation tax and to do so would result in double taxation."
Andrew George, MP for St Ives, said the Duchy needed to decide if it was a private estate or a body with "very unique" constitutional status.
He said: "My personal view is it is not a private estate but has a whole range of constitutional roles that can't be divided from its business activities. The bottom line is the Duchy can't have it both ways."
The Duchy is the estate given to the heir to the throne, and according to its 2012 accounts, comprises around 53,408 hectares of land in 24 counties, mostly in the South West of England and including the whole of the Isles of Scilly.
Charles receives the "revenue surplus" from the estate, and the Duchy's accounts show it grew by 2.8 per cent to £18.3 million in the past financial year. Its total worth grew by £32 million to £728 million, due to "buoyant agricultural property values".
An HMRC spokesman said it does not comment on the affairs of individual taxpayers.