King Charles has made history by revealing his £12.9m tax bill – but the payment is far from ordinary. Unlike any other UK taxpayer, 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, a deal struck in 1993 after public pressure over the cost of the monarchy and updated most recently in 2023 following Queen Elizabeth II’s death.
That voluntariness has drawn sharp criticism. Dan Neidle, founder of Tax Policy Associates, told the BBC: “If it’s voluntary, it’s not tax.” HMRC defines tax as money people are legally required to pay – putting the King’s payment in a category of its own.
“King Charles pays £12.9m in tax voluntarily, not legally required, under a secretive agreement.”
The Royal Household published the figure alongside its annual financial report, promising “transparency”. But the document leaves huge gaps. It does not explain how the £12.9m was calculated. We know the King has agreed to pay tax on personal income, income from the Privy Purse not spent on official duties, and capital gains on private property sales – but we do not know what share of the bill each represents.
The Privy Purse, a key source of private income, received £25.2m from the Duchy of Lancaster in the year to 31 March. The Duchy owns thousands of hectares of land, castles and quarries. But that is not the King’s only income: the report also mentions personal earnings that “may include investment income and trading profits” – without putting a figure on them.
Buckingham Palace described the move to publish the tax bills of both the King and Prince William as an effort to “encourage wider understanding of our accountability”. Yet historian Anna Whitelock said the disclosure puts the monarch “front and centre as a very rich man”. “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,” she added.
The voluntary nature, the opaque calculation, and the hidden personal income leave a key question unresolved: does this unprecedented transparency truly shed light on the King’s finances, or merely reveal how much remains in the shadows?