A QUESTION OF STATUS?

When it comes to tax, most of us pay it and most of us probably pay our fair share, and even a proportion of corporations (multi-national or otherwise) end up paying some degree of tax - despite the best efforts of creative accountants. The question of what exactly is a corporation and how much tax it should pay came before the House of Commons Public Accounts Committee (last month) in relation to the Duchy of Cornwall.

The Duchy of Cornwall, the Committee heard, provides the heir to the throne was a private income,  was not a corporation and that the prince voluntarily pays income tax. The Duchy of Cornwall, despite the name, happens to have significant landholdings well to the east of the Tamar which included the Oval Cricket Ground in London and a third of Dartmoor, not to mention pretty extensive property in Cornwall itself.  It is worth noting that the "title and honour" confers legal prerogatives in Cornwall which elsewhere belong to the Crown including for example the right to the property of people who die without heirs and ownership of the foreshore. Interestingly the duchy estate is worth some £762 million pounds.

A Royal aide revealed that the prince's estate does not pay capital gains tax because he "doesn't have access to the capital gains. The capital gains are all reinvested in the duchy for future dukes". MPs were that the profits were used to pay for the prince's public duties, as well as those of his wife the Duchess of Cornwall and those of Prince William, the Duchess of Cambridge and Prince Harry and that if parliament legislated to prevent Prince Charles using his private income in this way it would cost taxpayers more - to pay for his official duties - and he would be free to spend his money "on his other things".

A senior Treasury official told the committee, that the prince's tax arrangements worked this way because he does not pay capital gains tax because he always reinvests any profit from sales, and that "If the duke were to be taxed on the corporate income of the duchy as well as his income, he would be taxed twice."  The Treasury official also stated that the duchy differed to other corporations because the prince "is in the unusual position of getting all the income." The duchy estate of land and property - mostly in the south-west of England - was established by King Edward III in the fourteenth century to provide a private income for his son and heir to the throne.

The last time Prince Charles's representatives came before the Public Accounts Committee they were accused of performing financial "jiggery pokery" and he was said to be the recipient of the "best housing benefit scheme in the world".  The committee was fresh from finding the tax affairs of Google, Starbucks and Amazon wanting. Earlier this month, the prince faced calls from Andrew George, the Liberal Democrat MP for West Cornwall, to "come clean" about the Duchy of Cornwall's tax arrangements. Clarence House has said public funding for the Prince of Wales fell by £1 million to £1.2 million pounds in the last financial year, out of a total income of £20.2 million.

IT’S CORNWALL’S TIN

An opportunity for Cornwall?

With tin prices close to around $20,000 (£13,300 pound) a tonne there is a bit of a Tin mining frenzy kicking off in Cornwall where Marine Minerals Ltd (MML) are currently searching the seabed off for the tin tailings washed down from the old mines. It has been estimated that perhaps around 40% of the tin mined that was once mined on land is now sitting on the seabed. The plan is to sift the seabed at least 200m from the low water mark off the coast at St Ives Bay, Porthtowan and Perran. Elsewhere Treliver Minerals (UK exploration company) is test drilling for tin at Treliver Farm, near St Columb Major. At Callington an Australian mining firm New Age Exploration plans to re-open the old Redmoor mine.

The off shore plans are opposed by environmental groups and surfers who are concerned that it will destroy the natural habitat and the beach breaks. MML rejects the arguments and has launched a £500,000 environmental assessment before making an extraction licence application to the Marine Management Organisation (MMO). MML say that  the extraction process will use perhaps three tracked vehicles on the seabed sucking up the sand for sifting on a ship. The Cornwall-based firm is proposing to sift 2m tonnes of sand from the seabed every year for 10 years, with about 95% of that material going straight back onto the seabed. The rest will be brought ashore to produce about 1,000 tonnes of tin a year, with the waste possibly going into old clay pits in the St Austell area.

The MMO's has expressed its concerns in relation to possible impact of mining operations on marine life (including oysters and sea snails around Perran which is a proposed Marine Conservation Zone), St Ives Bay, which is an "important" migratory route and feeding area for sea trout, Atlantic Salmon and shell-fish production in St Ives Bay. They also have concerns about the stirring up of heavy metals on the seabed and an increase in algal blooms, the impact on tourism (due to noise close to the shore) and the £64 million pound local surfing industry.

The  question of jobs will loom large, as Cornwall has suffered years of economic neglect at the hands of Westminster. If the UK economic gets cold, then Wales gets flu and Cornwall pneumonia. I am sure that the Duchy of Cornwall (which is justifiably under fire for its activities) will endeavour to get more than its fair share along with the Mining companies, but, what about the people of Cornwall? Rather than business as usual where distant Westminster has the final say and then helps itself to the lion’s share of potential revenues perhaps the decision should be made by the Cornish and any mining license and extraction fees should sit in a ring fenced Cornish Sovereign Wealth Fund – just a thought?