If the taxman climbed aboard `Britannia' ...

Roger Trapp wonders whether the Queen's Revenue inspectors should take a closer look at one of her perks

Michael Portillo's announcement of a new royal yacht to replace Britannia has produced predictable outrage that the nation's already-stretched resources should be used in this way. But what about the effect on the Queen's finances?

Now that Her Majesty has accepted that she is liable for income tax, could not her use of the pounds 60m floating palace be a benefit in kind under Inland Revenue guidelines?

John Newman, tax partner with the accountants Smith & Williamson, playfully suggests that the key question is whether being Queen amounts to holding an office of the Crown. If it does, and the yacht is a perk that comes with the job, then she could face having to pay the Revenue 20 per cent of its market value every year. The provision of such supplies as water, oil and fuel would lead to further charges, though if she were to pay her own expenses that would reduce her tax liability.

And what about travelling expenses? That, according to Mr Newman, depends on what Her Majesty is Queen of. It is arguable that since she is basically Queen of Great Britain and Northern Ireland, plus a few colonies, only travelling between such places is covered. But that still leaves the question of the use of the vessel for trade trips and journeys outside her kingdom, which are part of the Queen's official duties, as opposed to exotic holidays.

John Whiting, a tax specialist at another accountancy firm, Price Waterhouse, agrees that this is all interesting conjecture, but is "not sure if it flies". Joining in with the light-hearted spirit of Mr Newman's musing, he believes a lot depends on whether Her Majesty is employed by the Queen, or is the employer.

But then he adds his own kicker: what if the Queen funded the yacht herself? If she were able to argue that she intended to use the craft "solely and exclusively" for her trade, she could take advantage of capital allowances on the grounds that a ship would come within the definition of plant and machinery.

Nevertheless, she would probably have to act quickly. The latest Finance Bill proposes reducing the allowance on long-life assets from 25 per cent to 6 per cent - though there is a transitional period until 2010.

So what is the true position? We may never know. While the rules on the use by the Prime Minister and Chancellor of Numbers 10 and 11 Downing Street are set out in official papers, the Inland Revenue - understandably perhaps - is keeping mum on this one

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

PROMOTED VIDEO
Sport
David Moyes gets soaked
sport Moyes becomes latest manager to take part in the ALS challenge
Life and Style
techCould new invention save millions in healthcare bills?
Voices
A meteor streaks across the sky during the Perseid Meteor Shower at a wind farm near Bogdanci, south of Skopje, Macedonia, in the early hours of 13 August
voicesHagel and Dempsey were pure Hollywood. They only needed Tom Cruise, says Robert Fisk
News
peopleEnglishman managed quintessential Hollywood restaurant Chasen's
Life and Style
food + drinkHarrods launches gourmet food qualification for staff
Arts and Entertainment
Michael Flatley prepares to bid farewell to the West End stage
danceMichael Flatley hits West End for last time alongside Team GB World champion Alice Upcott
News
Members and supporters of the lesbian, gay, bisexual, transgender (LGBT) community walk with a rainbow flag during a rally in July
i100
Life and Style
Black Ivory Coffee is made using beans plucked from elephants' waste after ingested by the animals
food + drinkFirm says it has created the "rarest" coffee in the world
Arts and Entertainment
Jamie T plays live in 2007 before going on hiatus from 2010
arts + entsSinger-songwriter will perform on the Festival Republic Stage
Life and Style
food + drinkThese simple recipes will have you refreshed within minutes
News
Jermain Defoe got loads of custard
i100
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    C#.NET Server Side Developer (C#, XML, WCF, Unit Testing,SQL)

    £30000 - £40000 per annum + benefits+bonus+package: Harrington Starr: C#.NET ...

    Junior Database developer (SQL, T-SQL, Excel, SSRS)

    £20000 - £30000 per annum + benefits+bonus+package: Harrington Starr: Junior D...

    Business Analyst - Banking - London - £550 - £650

    £550 - £650 per day: Orgtel: Business Analyst - Traded Credit Risk - Investmen...

    Data Centre Engineer - Linux, Redhat, Solaris, SAN, Puppet

    £55000 per annum: Harrington Starr: A financial software vendor at the forefro...

    Day In a Page

    All this talk of an ‘apocalyptic’ threat is simply childish

    Robert Fisk: All this talk of an ‘apocalyptic’ threat is simply childish

    Chuck Hagel and Martin Dempsey were pure Hollywood. They only needed Tom Cruise
    Mafia Dons: is the Camorra in control of the Granite City?

    Mafia Dons: is the Camorra in control of the Granite City?

    So claims an EU report which points to the Italian Mob’s alleged grip on everything from public works to property
    Emmys look set to overhaul the Oscars as Hollywood’s prize draw

    Emmys look set to overhaul the Oscars as Hollywood’s prize draw

    Once the poor relation, the awards show now has the top stars and boasts the best drama
    What happens to African migrants once they land in Italy during the summer?

    What happens to migrants once they land in Italy?

    Memphis Barker follows their trail through southern Europe
    French connection: After 1,300 years, there’s a bridge to Mont Saint-Michel

    French connection: After 1,300 years, there’s a bridge to Mont Saint-Michel

    The ugly causeway is being dismantled, an elegant connection erected in its place. So everyone’s happy, right?
    Frank Mugisha: Uganda's most outspoken gay rights activist on changing people's attitudes, coming out, and the threat of being attacked

    Frank Mugisha: 'Coming out was a gradual process '

    Uganda's most outspoken gay rights activist on changing people's attitudes, coming out, and the threat of being attacked
    Radio 1 to hire 'YouTube-famous' vloggers to broadcast online

    Radio 1’s new top ten

    The ‘vloggers’ signed up to find twentysomething audience
    David Abraham: Big ideas for the small screen

    David Abraham: Big ideas for the small screen

    A blistering attack on US influence on British television has lifted the savvy head of Channel 4 out of the shadows
    Florence Knight's perfect picnic: Make the most of summer's last Bank Holiday weekend

    Florence Knight's perfect picnic

    Polpetto's head chef shares her favourite recipes from Iced Earl Grey tea to baked peaches, mascarpone & brown sugar meringues...
    Horst P Horst: The fashion photography genius who inspired Madonna comes to the V&A

    Horst P Horst comes to the V&A

    The London's museum has delved into its archives to stage a far-reaching retrospective celebrating the photographer's six decades of creativity
    Mark Hix recipes: Try our chef's summery soups for a real seasonal refresher

    Mark Hix's summery soups

    Soup isn’t just about comforting broths and steaming hot bowls...
    Tim Sherwood column: 'It started as a three-horse race but turned into the Grand National'

    Tim Sherwood column

    I would have taken the Crystal Palace job if I’d been offered it soon after my interview... but the whole process dragged on so I had to pull out
    Eden Hazard: Young, gifted... not yet perfect

    Eden Hazard: Young, gifted... not yet perfect

    Eden Hazard admits he is still below the level of Ronaldo and Messi but, after a breakthrough season, is ready to thrill Chelsea’s fans
    Tim Howard: I’m an old dog. I don’t get too excited

    Tim Howard: I’m an old dog. I don’t get too excited

    The Everton and US goalkeeper was such a star at the World Cup that the President phoned to congratulate him... not that he knows what the fuss is all about
    Match of the Day at 50: Show reminds us that even the most revered BBC institution may have a finite lifespan – thanks to the opposition

    Tom Peck on Match of the Day at 50

    The show reminds us that even the most revered BBC institution may have a finite lifespan – thanks to the opposition