Tax Watch UK, an investigative think tank, has criticised the Grand Theft Auto V developer for paying no corporation tax between 2009 and 2018, all the while generating an estimated profit of £4.1 billion during that time period.
Rockstar Games also has issued claims worth an estimated £42.3 million from the Video Game Tax Relief Fund between 2015 and 2017. This fund is a specific points-based test on the cultural significance of the video game, judged by the British Film Institute on factors like its setting, the location of the development process, and whether the title ‘reflects British creativity’. If studios score over half of a possible 31 points, they qualify for the tax break. According to the report, Rockstar North in Edinburgh snagged almost a fifth of all Video Game Tax Relief funding doled out since its beginning in 2014.
Speaking to Gamesindustry.biz, Director of TaxWatch George Turner explained, ‘The Video Games Tax Relief was designed to help developers of games with a cultural content that would struggle to sell in the international market. The fact that such a large amount of that relief is going to the developers of Grand Theft Auto clearly shows that the relief is not working as intended.’
However, in a statement to PCGamesN, the British Film Institute responded differently: ‘as long as it’s on expenditure in the UK, I think it’s about those companies growing, and that’s the spirit of what the tax relief was intended for.’
The report by Tax Watch does question this. Although totally legal, there are also claims that almost 100 per cent of the profit Rockstar Games’ titles generate in the UK is sent to the U.S. counterparts instead. Tax Watch UK urgently suggests that HMRC conduct a review of the two companies’ activities in the UK, and as yet, Rockstar Games has not commented on the report.