King Charles has made history by revealing his £12.9m tax bill for 2024-2025, but the payment is far from ordinary. Unlike every other taxpayer in Britain, the King is not legally required to pay income tax, capital gains tax, or inheritance tax. Instead, he pays voluntarily under a Memorandum of Understanding (MoU) with the government, originally agreed in 1993 and last updated in 2023.
This voluntary arrangement has drawn sharp criticism. Dan Neidle, founder of Tax Policy Associates, told the BBC: “If it’s voluntary, it’s not tax.” HM Revenue & Customs defines tax as money that individuals and businesses are legally required to pay. The Royal Household does confirm that the King pays VAT, employer taxes, and local rates “in line with requirements,” but the bulk of his contribution remains a matter of choice.
“King Charles voluntarily paid £12.9m in tax, but critics say voluntary payments are not truly tax.”
The King’s private income comes largely from the Duchy of Lancaster, an estate that owns assets including the Savoy Hotel in London. The annual report shows the Duchy provided £25.2m to the Privy Purse in the year to 31 March. However, the King also has personal earnings from investments and trading profits, though no figure is given. How the £12.9m tax bill is calculated remains unclear; the report does not break down what proportion comes from income tax, capital gains, or other sources.
Buckingham Palace described the publication of the King’s tax details – alongside those of Prince William – as part of a “commitment to transparency” aimed at encouraging “wider understanding of our accountability”. But historian Anna Whitelock said the move puts the monarch “front and centre as a very rich man”. She added: “I do think this is very much a sign of the times, and it’s an attempt by the monarchy to try and get on the front foot and before they were absolutely pushed to try and show they are responsive and not reactive.”
While the King’s voluntary tax payment is disclosed, the Sovereign Grant – his main source of public funding – is set to rise to around £100m over the next two years, according to Channel 4 News. The contrast highlights the ongoing debate over the monarchy’s finances and whether voluntary contributions amount to genuine tax.