Does The Queen Pay Taxes? A Guide To The Royal Finances After The Paradise Papers Leak

As part of the so-called Paradise Papers leak, documents have revealed that the Queen’s private estate invested millions in offshore funds that have never before been disclosed.

Around £10 million from the Queen’s private estate was paid into the Cayman Islands and Bermuda between 2004 and 2005, according to the recently revealed documents.

The leak, which has seen millions of documents released, has revealed how the powerful and wealthy have secretly invested vast sums in offshore tax havens.

While Britons are all required to pay tax either directly (though contributions such as National Insurance and Income Tax) or indirectly (through things such as VAT), the Queen is an anomaly.

One of the perks of being monarch is that she is officially exempt from UK tax laws.

Despite this, however, in 1992 Her Majesty chose to voluntarily start paying income tax and capital gains tax.

Since 1993 her personal income has also been taxable as for any other taxpayer.

At the time Buckingham Palace denied it was because of rising criticism of growing cost of the monarchy.

The Queen has always been subject to Value Added Tax (VAT) and pays local rates on a voluntary basis.

BBC Royal correspondent Nicholas Witchell said that the issue of the investments was “not a question of tax avoidance, but of judgement on behalf of her advisors”.

He said: “It is extraordinary and puzzling that her advisers could have felt that it was appropriate – for somebody whose reputation is based so much on setting a good example – to invest in these offshore funds.

“There will be meetings and questions being asked within Buckingham Palace this morning as the monarchy finds its reputation tarnished by association.”

The chief finance officer of the Queen’s £500m estate, Chris Adcock, told the BBC: “Our investment strategy is based on advice and recommendation from our investment consultants and appropriate asset allocation…

“The Duchy has only invested in highly regarded private equity funds following a strong recommendation from our investment consultants.”

A spokesperson for the Duchy of Lancaster added: “We operate a number of investments and a few of these are with overseas funds. All of our investments are fully audited and legitimate.

“The Queen voluntarily pays tax on any income she receives from the Duchy.”

Among the Royal investments is in retailer BrightHouse, which has been accused of exploiting the poor by overcharging customers and using hard sell tactics on the vulnerable. It was last month ordered to pay £14.8m in compensation to 249,000 customers.

Asked on Monday if the Queen should say sorry, the Labour leader said: “Anyone that is putting money into tax havens in order to avoid taxation in Britain, and obviously investigations have to take place, should do two things: not just apologise for it but also recognise what it does to our society.

“If a very wealthy person wants to avoid taxation in Britain and therefore put money into a tax haven somewhere, who loses? Schools, hospitals, housing, all those public services lose and the rest of the population have to pay to cover up the deficit created by that.”

There is nothing to suggest that any of the Royal investments are illegal.