King Charles has made history by revealing his £12.9m tax bill for 2024-2025, but the payment is far from ordinary. The King is not legally required to pay income tax, capital gains tax, or inheritance tax. Instead, he voluntarily pays some of these taxes under a Memorandum of Understanding (MoU) with the government, originally struck in 1993 after public pressure over the cost of the Royal Family and last updated in 2023 after Queen Elizabeth II’s death.
This voluntary arrangement has drawn scrutiny. Dan Neidle, founder of Tax Policy Associates, told the BBC: “If it’s voluntary, it’s not tax.” HMRC defines tax as money individuals and businesses are legally required to pay – a definition the King’s payments do not meet.
“King Charles voluntarily paid £12.9m in tax despite no legal obligation, sparking debate over royal transparency.”
To complicate matters, the King does pay VAT, employer taxes, and local rates “in line with requirements,” according to the Royal Household’s annual financial report. But the £12.9m figure itself is opaque. The Royal Household describes releasing the bill as part of its “commitment to transparency,” yet it does not explain how the sum 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 not what proportion each contributes.
The Privy Purse, a source of private income for the monarch, received £25.2m from the Duchy of Lancaster – which owns, among other assets, the Savoy Hotel – for the year to 31 March. Beyond that, the King has personal earnings including “investment income and trading profits,” though the report puts no figure on these.
Buckingham Palace said the move to publish the King’s tax bill – alongside Prince William’s – aims to “encourage wider understanding of our accountability.” Historian Anna Whitelock argued it puts Charles “front and centre as a very rich man” and is “an attempt by the monarchy to try and get on the front foot” before being forced to be more transparent.
Yet questions remain. Without a breakdown of the £12.9m, and with the payments voluntary by nature, critics argue the gesture does little to clarify royal finances. As Neidle put it, if it’s not required, can it truly be called a tax?