The Treasury should take a closer look at the financial affairs of the Duchy of Cornwall, which manages land and properties to provide an income for the Duke of Cornwall and his future heirs, and make sure it is clear how much tax is being paid, according to the Public Accounts Committee (PAC).

The PAC's report on the financial performance of the Duchy says it did well in 2012-13, increasing its total income to £28.8m and producing an overall surplus of £19.1m. No corporation tax is payable on this, and MPs suggested that the Treasury should examine whether this tax exemption creates an unfair advantage over its competitors.

The Duchy's surplus is distributed as income to the Prince of Wales, the current Duke of Cornwall. After taking account of £1.2 m income from public sources and £1m in expenses for carrying out official duties, this gave a remaining surplus of £9.2m, on which Prince Charles voluntarily paid tax.

The combined total of income tax and VAT paid by the Prince of Wales was £4.4m but PAC chair Margaret Hodge said the prince should disclose these figures separately to make clear how much income tax is paid and at what rate, although she acknowledged that the Duchy said the 'vast majority' of the total is income tax.

In addition, the PAC wants to see the Treasury making independent checks on the Duchy's finances, rather than relying on the information provided. 'Details of the Treasury's approvals for the Duchy's proposed land transactions over £500,000-of which there are around 15 a year-are not published. Greater transparency is needed,' the PAC report said.

However, the PAC report says MPs were impressed by how the Duchy is taking a long-term view in its financial strategy, with investment in commercial, high-quality and innovative schemes, and careful diversification of its range of assets. This includes extending some of the ideas first tried out at Poundbury, which was designed and developed by the Duchy, to an urban site in Newquay.