Until 2013, the costs of the monarchy – that's the Queen in her role as head of state and the other working royals – were funded by a civil list payment and a number of separate grants covering travel, property maintenance, communications and other expenses.
All these costs have now been rolled into one single annual payment called the “Sovereign Grant”. This has been set at 15% of surplus revenue from the crown estate - a publicly-owned property portfolio - resulting in a payment of £36.1m for 2013/2014, rising 29% to £40m this year.
However, the Sovereign Grant is just one part of the total cost of the monarchy. The royal family's security bill is picked up by the metropolitan police, for example, while the costs of royal visits are borne by local councils.
Meanwhile, income from the Duchy of Lancaster and the Duchy of Cornwall – despite belonging to the nation - goes directly to the Queen and Prince Charles respectively, depriving the treasury of tens of millions of pounds every year.
When all this hidden expenditure is included, the real cost of the monarchy to British taxpayers is likely to be around £334m annually.