Prince's tax bill rises as wife cuts workload: Publication of Duchy's accounts reveals Highgrove is leased to Charles

THE Prince of Wales is having to pay more tax because his wife has drastically reduced her workload, it was disclosed yesterday.

In another twist, it was also disclosed that Prince Charles is not a home-owner: he is renting Highgrove House on a 15-year lease from the Duchy of Cornwall.

The disclosures were made by the Prince's officials to coincide with publication of the annual accounts for the Duchy of Cornwall. They show the Prince's income from the Duchy rose last year from pounds 3.4m to pounds 4.1m.

Under the Prince's new arrangement agreed with the Inland Revenue, he will voluntarily pay income tax of 40 per cent after deducting the cost of official duties for himself and the Princess of Wales. As the Princess has sharply reduced her engagements, he is unable to claim for much of her current expenditure. A spokesman refused to disclose the cost to him of her decision to withdraw from the public gaze. But he said: 'He's having to pay more because she's doing less.'

According to the spokesman, in the first year that the Prince came into line with the rest of society and paid tax, the end result was about the same as it would have been under the previous arrangement, in which he 'surrendered' voluntarily 25 per cent of his income from the Duchy to the Exchequer. He handed over pounds 853,008 for 1992-93. This year's figure has not been disclosed.

Officials were keen to raise a corner of the very thick carpet covering the Prince and Princess's financial affairs.

He is not claiming for his suits, just uniforms. As a patron of the Red Cross, the Princess has a uniform which is tax-deductible.

No figures were given for the cost of running the couple's office but it was pointed out that since 1985, staff numbers have risen from 26 to 62. Most of the extra manpower was needed because he is more active. All his showpiece speeches are heavily researched beforehand and are always followed up - hence the extra, tax-deductible, manpower.

Letters to the office are running at 2,000 a week. Last year, he received 2,500 invitations against her 1,500.

The Prince has not received a tax coding - his tax return is handled personally by 'a senior tax inspector.'

The Princess has no real income. Patrick Jephson, her private secretary, presents Richard Aylard, the Prince's private secretary and treasurer, with a list of her spending requirements. 'The rule has always been the Princess spends what she needs to spend,' the spokesman said, with one eye on recent tabloid tales of the Prince's anger at her haute couture bills.

Most of the increase in the Duchy's income came from putting up rents on land it owns in the West Country. At the same time, the Prince has done well on the stock market. In 1992-93, the Duchy had pounds 27.8m invested in stocks and shares; in 1993-94, its portfolio was pounds 40.8m.

Until 1993, the Prince paid no rent on Highgrove, despite the Gloucestershire stately home technically being part of the Duchy's holdings. He now pays 'a market rent' to the Duchy after his advisers decided the previous arrangement could be regarded by the Inland Revenue as a taxable benefit in kind.