It also makes clear that they will not represent the Royal Family during visits or public engagements.
The clarification comes after Harry and Meghan moved back to the UK with their children, Archie and Lilibet, last month. The couple are expected to make more public appearances this autumn as they settle into life in the UK and continue their charitable work.
What did King Charles’ letter say about Harry and Meghan?
According to Palace sources, the King's letter has been sent to Prince Harry's team, government departments, military officials and Lord Lieutenants.
Lord Lieutenants are the monarch's local representatives and can be involved in royal visits and engagements. The letter makes clear that any activities involving Harry and Meghan should not be treated as royal engagements.
"It is well known that in January 2020 the Duke and Duchess stepped down from undertaking representative duties on behalf of the Sovereign, and are no longer working members of the Royal Family," the letter says.
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The message from the King also stresses that the arrangement agreed in 2020, when the couple stepped back from royal duties, remains in place.
The agreement, known as the Sandringham Agreement, ruled out a "half-in and half-out" arrangement. This meant Harry and Meghan could not continue as working royals while also pursuing their own commercial interests.
"The charitable work of the Duke and Duchess is a personal matter for them both and undertaken in their private capacity," the letter adds.
It also tells organisations seeking guidance on how Harry and Meghan should be received, especially when public money could be involved, to contact Buckingham Palace.
The King's message says that any questions from organisations about the reception to be given to the Sussexes, "particularly where recourse to public funds may be required, should be directed to Buckingham Palace".
Harry appears in first picture since UK return
The Palace clarification comes as Prince Harry appears to have been pictured publicly for the first time since returning to the UK.
A photo shared on social media by Tower Bridge Studios, a London TV and podcast studio, appears to show Harry at the facility.
The couple have largely stayed out of the public eye since returning, but they are expected to attend public events in the coming months while supporting causes and charities linked to them.
Harry is expected to continue his work with charities including the Invictus Games, which are due to be held in Birmingham next year.
There have also been reports that Meghan is considering a return to acting.
Why did Harry and Meghan leave royal duties?
Harry and Meghan's departure from royal life in the UK was announced in 2020 and was followed by a strained relationship with the Royal Family. The couple later documented their experiences in their Netflix documentary.
They moved to California and established their financial independence there. Harry went on to publish his best-selling memoir Spare, while Meghan launched her online food and lifestyle brand, As Ever.
The couple surprised many by returning to the UK this summer, with their children also expected to attend school there.
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Despite the return, the King's letter confirms that their status has not changed and that they remain private citizens.
Harry and Meghan's security concerns remain
Security arrangements for the couple in the UK remain a separate issue.
The letter states: "Any operational security issues should continue to be directed to the relevant police authorities."
Harry has previously complained about the level of police protection available to him in the UK. The Palace has said such matters must be addressed through the Royal and VIP Executive Committee, known as Ravec, which takes decisions on security for royals and other public figures.
Palace sources said the decision to make the Lord Chamberlain's letter public was intended to provide transparency and avoid the details emerging through leaks.