Tax Break

Who said tax is boring?

God save the queen from taxes!

She is the one in the top right-hand corner

The Queen (there is only one “Queen”) was often lampooned in the  1980s TV series “Spitting Image” . It starred a bunch of incredibly elastic, outrageously exaggerated latex puppets. My favourite sketch had the Queen at her desk, surrounded by her totally dysfunctional latex family, writing Christmas cards to foreign countries. Completing the last card  she announced “Right, I’ll just put the stamps on” and proceeded to turn her latex head sideways and thwack it down onto a giant inkpad on the desk followed by a further wallop of the head onto an envelope, producing a passable impression of her profile.

Truth be told, there is nothing strange about this. The Royal Mail is Her Majesty’s postal service and it would be absurd for her to pay for delivery.  And before I get placed in the stocks by members of the loony left - sorry lads, this is not about “primus inter pares”; HER prime minister is “first among equals”. The Queen is not one of us. She is not part of our democratic tradition. She is  the Mothership. 

“She is driving home. They can’t book her”

Forget petty things like the Royal Mail – the Queen is even above the law. Put simply, the courts belong to her.  If she fancies, she can go through the Green Channel at Heathrow Airport carrying 2 bottles of whisky and 400 fags – and nobody can stop her. If she is wandering around Windsor Tescos and decides to pocket a  six-pack of Heineken and a packet of  smoky bacon crisps, the police officer called to the scene of the crime will just unctuously genuflect  while waiting for an unmarked car to whizz round from the castle and bundle her in. If she has one over the eight on Christmas Eve and takes the Landrover out for a drunken winding tour of Sandringham (Christmas might be Balmoral) the local constabulary sirens will remain impotently silent.

In fairness this all sounds extremely strange to 21st century western man (or woman). But, if it wasn’t that way she would not be the Queen but just another Reality TV star.  I imagine she does not even have a passport. Nowadays, we are all stuck with that ubiquitous burgundy creation of the EU, but the wording on the inside cover of the British version still reads: “Her Britannic Majesty’s Secretary of State  requests and requires in the name of Her Majesty…to allow the bearer… to pass freely without let or hindrance…” What would she have had on her passport? “Don’t mess with me. I’m the Queen”?

The British don’t like their queens third-hand (or with bulbous noses)

Of course, it is not quite as extreme as I have described. Suspension of the British (or previously English) Constitution has always been an option. When King Richard III got a bit too trigger happy (at least according to Shakespeare) he ended up wandering around a battlefield offering his kingdom for a horse before being conveniently slain by his successor. And then there was that poor chap Charles I (for the benefit of non-native English speakers the “I” is pronounced as it is spelt – “The First”)  who, on a cold day in January 1649 was left without a head upon which to wear his crown and replaced for a few years by a boring republic. Indeed, if Her Majesty was feeling a bit gung-ho she need only look at the fate of her grandfather’s first cousin (not to mention his poor family) who copped it good and proper in the Russian Revolution. Meanwhile, minor misdemeanours like sharing the royal prerogative with married women (for clarity, this one refers to kings) could be dealt with by the government proposing early retirement, as was the case with the Queen’s uncle Edward VIII (pronounced Duke of Windsor, spit, spit).

However, there is one gaping hole in the consistency of the system. Since 1993, the Queen has paid income tax and capital gains tax. The Queen cannot be liable to  tax. Taxes are collected by Her Majesty’s (that’s her folks!) Revenue and Customs. And before some bright spark mentions (I really wish people WOULD add comments below) that, as sleight of hand, she pays the tax and takes it back in government funding – let’s get the record straight.

Kings and Queens used to be self-financing. For historic reasons – normally murder, rape and pillage – successive generations of the monarchy have succeeded in accumulating vast fortunes. By the time James II fled England in the Glorious Revolution, Parliament had had enough and his successors (the husband and wife team of William and Mary) were the first monarchs to have the Crown’s peacetime revenue fixed by Parliament with a sum to defray the costs of running the Royal Family and Civil Government (civil service, judges, ambassadors etc.) – the Civil List.

Since 1789 America has had 44 presidents and Britain 9 monarchs. The Watergate break-in occurring a few weeks before Edward VIII’s death, there has been 1 abdication apiece

When George III (the one that lost America) came to the throne in 1760 it was decided that he should surrender the income from the Crown Estate (with the exception of the Duchies of Lancaster, Cornwall and other bits and pieces) for the period of his reign in return for an updated Civil List that no longer included responsibility for civil government. And that has been  the situation ever since. (As an aside, it is interesting to note that in the 252 years since Georgy-Porgy bit the bullet,  3 monarchs have covered almost 75% (George, Victoria and Elizabeth) of the period.)

But to celebrate 250 years of the glorious Civil List system, the government announced its abolition in 2010. With effect from 2013, in place of the Civil List and specific grants for certain expenditures – there will be a new single Sovereign Support Grant. While this sounds like a welfare payment (“We will give this old age pensioner an extra  million quid for Christmas to cover her heating costs”),  it is indeed a radical new system in that it is based on a percentage – initially 15% – of the revenue from the Crown Estate. Anti-monarchists should note that if the Monarchy was abolished peacefully the Queen would presumably get all her income back from the Crown Estate. So, apart from the loss of  tourist revenue that would accompany a republic, the Treasury would be down just based  on the simple arithmetic.

So, why on earth is she paying taxes? In 1993, following a major fire at Windsor Castle for which the government had to foot the bill,  the Queen “announced” that she would voluntarily pay tax on her private income (not the Crown Estate that , going forward, is going to be taxed at an effective rate of 85% – high even by Francois Hollande standards). This was, effectively, to silence the mob – ie the British public who could not comprehend why they should pay for the repairs.

The best way to describe this policy is populist and potty. The Queen cannot pay taxes for one simple reason - because the Queen cannot pay taxes. If they want to tap her for a few bob why not just reduce her new Support Grant by a percentage of her private income (which just happened to be at the current personal tax rate)? That would be a legitimate sleight of hand and the sort of creative accounting some accountants used to like in the good old days  before Arthur Andersen got its comeuppance.

Sixty years of devoted service

This weekend marks the official celebration of the Queen’s Diamond Jubilee. As a constitutional monarch she reigns but does not rule. Perhaps one of her most  endearing qualities is that she does not exploit her privilege. Here is a true story never told in print before. Several years ago an old acquaintance, turning a London corner in his Jaguar, was inadvertently caught up in a Royal Cavalcade. Worse, he rear-ended the Queen’s car. Now, in every civilised country when you rear-end somebody it is your fault and, if it happens to be the Head of State you are probably going to wish you were not born. In the event, an aide got out of the Rolls, strolled over to the Jag, presented the driver with a card and told him to bring the bill for his repairs to the tradesmen’s entrance at Buckingham Palace where he would be (and was)  fully reimbursed. End of story. That is class. God save the Queen!

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2 thoughts on “God save the queen from taxes!

  1. Puggy on said:

    Dear John
    This is not a tax question, but a BC one. If Edward VIII was unable to become monarch due to his marriage to “that horrible woman”, a divorcee, how is it that Prince Charles is not blocked from becoming King due to his marriage to Camilla, also a divorcee? Did the law change? This is keeping me up at nights, so please do provide a definitive answer.

  2. The only legal issue I am aware of is that there was a question mark over the validity of her first divorce which, since Edward was to be her third husband, would have made the marriage not merely bigamous but polygamous – a bit like United winning the treble.

    There was a – no longer valid – religious objection since, in those days Anglican divorcees could not get married in Church while their ex-husband(s) were still alive. Although the Archbishop of Canterbury had a Christian name out of a superhero comic (Cosmo) he does not appear to have contemplated having the two husbands rubbed out but, at the same time, was not happy about having the head of the Church getting married in a Registry Office.

    The rest was just prejudice – but, just for once, thank God for prejudice.

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