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Rockstar North take 37% of UK VideoGame Tax Relief Fund , Pays No Corporation Tax in 10 Years

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Maybe Edge will ask them what's up with this? They could do a feature on tax avoidance and developer crunch and never get an exclusive feature again! Ha... ha...hmmm.

 

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Rockstar North, the Edinburgh based company behind the wildly successful Grand Theft Auto series, has published its latest accounts, revealing a huge increase in claims for Video Games Tax Relief. As reported in today’s Sunday Telegraph, analysis by TaxWatch shows that the claim was by far the largest for Video Games Tax Relief granted by HMRC in 2018/19, accounting for 37% of all claims made by the UK video games industry in that year.

 

The accounts for 2019 show that the company claimed £37.6m in Video Games Tax Relief, taking its total to £80m since the scheme was introduced. Of the 1,110 claims made since VGTR was launched, Rockstar have accounted for a quarter of all the relief claimed from the government with just two games.

 

When VGTR was introduced, the government estimated that the new relief would cost in the region of £35m a year, and support smaller games developers. The scheme is now costing in excess of £100m a year, with close to half of all relief being claimed by just four companies.

 

https://www.taxwatchuk.org/rockstar_2019_tax_relief/

 

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GTA V has sold more than 100m copies, making it one of the most profitable entertainment products of all time. It racked up £1bn in its first three days on sale in 2013. According to Take-Two earnings reports, GTA V’s online component, GTA Online, has generated hundreds of millions in revenue.

 

But the company paid no corporation tax between 2009 and 2018. It received £42m in tax credits from the government’s video games tax relief scheme, which was set up in 2014 to bolster the UK’s £5bn games industry, much of which is made up of small and medium-sized developers. The sum is equivalent to 19% of the total relief paid to the entire UK games industry since 2014, TaxWatch reports.

 

https://www.theguardian.com/business/2019/jul/29/grand-theft-auto-maker-uk-corporation-tax-rockstar-north-games

 

So... as a dumb person, what's the deal? Is VGTR just a way of bribing Rockstar to keep it's studio and jobs in the UK?

 

It seems a little bit cheeky (or should-be-criminal) to drain a government money pot (presumably tax payer's money) without paying anything back in tax, whilst turning over a ridiculous profit with one of the most successful franchises/studios in the industry.

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8 minutes ago, grindmouse said:

What's the deal? Is VGTR just a way of bribing Rockstar to keep it's studio and jobs in the UK?

 

Yes.

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Not sure what to think about this sort of thing. As with Starbucks and everyone else - it's not illegal and if people have issues with it they should direct the anger towards those that create the problem.

 

If the average person was given a similar deal for their own tax on earnings I would wager that most would take up their offer.  I'm not saying it is right but I find it harder to blame companues doing this when it is legitimately laid out in front of them for the taking.

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You would have thought the Tax relief fund would be means tested, For Rockstar North to take £80 million in a period they've released two titles is absolutely disgusting.

 

It should be there to help small devs struggling to pay their rent not buy the CEO a new Lamborghini.

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27 minutes ago, Clipper said:

It is not illegal but it is immoral so you can direct your anger to the immoral company taking advantage. They are claiming tax credits in a country where they aren't paying corporation tax despite making profit. Whichever way you cut that it is a shitty thing to do.

 

If a similar deal were available to individuals then I can assure you not all would take it as many want to pay their way and not be utterly morally bankrupt.

 

Rockstar is a particularly toxic company with its practices regarding crunch etc being well known. But people don't give a shit as long as they can buy GTA and Red Dead.

 

I'm not disagreeing with you on the morality of their actions - it stinks.  I must be a more cynical individual than you regarding an individual facing something similar. You are right that there would be some who took the"high road" as it were but I still think a significant amount of individuals wouldn't think twice.

 

Making your opinion known by not buying their products is the correct way to go about it but I agree with what you say in that the average person couldn't give a hoot about it. Starbucks didn't seem to be too troubled by the bad publicity did they and that was mainstream news?

 

I think the problem could be avoided had there been some tighter control over the scheme similar to means testing or something.

Anyway - didn't mean to rant on. Was just worried I was coming across as supporting Rockstar's actions.

 

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Not to derail the thread but do they mean anything in regards to forum membership? I.e. set number = temp/perm ban?

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3 minutes ago, iknowgungfu said:

Not to derail the thread but do they mean anything in regards to forum membership? I.e. set number = temp/perm ban?


Nope - they’re just a cowards ways of disagreeing with you.

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1 minute ago, footle said:


Nope - they’re just a cowards ways of disagreeing with you.

Don’t be silly

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This is two separate things conflated, isn't it? It's quite common for countries to give tax reliefs for industries they want to encourage, and I'm not sure there's much bad or surprising that a big developer takes a large share of a tax relief designed for that industry. See every TV show filming in Canada, or indeed I think they have their own tax rebate thing for games developers.

 

Then there's the separate issue, I suspect, that multinationals have gotten very good at moving their profits around. I assume Rockstar aren't paying any UK Corporation Tax because Take Two are recording it all somewhere else?

 

You could certainly argue that a UK tax relief should probably be structured differently to prevent that sort of sharp practice.

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4 minutes ago, footle said:


Nope - they’re just a cowards ways of disagreeing with you.

 

Lying.

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2 hours ago, iknowgungfu said:

Not sure what to think about this sort of thing. As with Starbucks and everyone else - it's not illegal and if people have issues with it they should direct the anger towards those that create the problem.

 

This is true to a point, but it's worth remembering it's not an either or. You can direct your anger towards those that create the problem while also closing your wallets to those who exploit it.

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1 hour ago, Ghosty said:

Only poor people pay tax. That the rule of law.


And £80million of that tax gets donated to a company whose last GTA game made over $6 billion in revenue. Take from the poor to give to the rich.

 

I don’t see how the next GTA game can claim any high ground from which to throw shade / satire in any direction.

 

They'll probably take the Gervais route and punch down at woke culture.

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If you don't give rich individuals/companies a way of paying less tax they just trot off to Monaco/Ireland. You don't have to like it but that's how it works.

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2 hours ago, iknowgungfu said:

Not to derail the thread but do they mean anything in regards to forum membership? I.e. set number = temp/perm ban?

 

There's nothing like the smell of negs in the morning.

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28 minutes ago, grindmouse said:

I don’t see how the next GTA game can claim any high ground from which to throw shade / satire in any direction.

The 'satire' in GTA games is equally cynically deployed, so I don't think there's any contradiction. It never takes any kind of brave or risky political stance, it exploits easy targets and tells us were all just as shitty as each other. So the fact that they're just as shitty as everyone in their games is entirely consistent.

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12 minutes ago, Trumpets said:

If you don't give rich individuals/companies a way of paying less tax they just trot off to Monaco/Ireland. You don't have to like it but that's how it works.

 

Rock Star North employ 650 people, with the 37million they take you could afford to give those people about 50k a year salary.

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There seems to be complaints about the control systems for both GTA and Red Dead Redemption 2, moans about the stale gameplay or that they've been milking GTA V for nearly 7 years and then there's the business practices of tax avoidance and the crunch mentality they force upon their staff with fairly low wages and benefits (£24k average salary for Rockstar North, not exactly brilliant).

 

I really don't understand why people bother with Rockstar developed games.... 

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I stopped buying Rockstar games ever since GTA IV. It's one of those devs/publishers I simply refuse to support.

 

Although I must confess I borrowed both Red Dead Redemption and GTA V, thinking they're good but overrated. So it's not too much of an effort to avoid buying their games.

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Yeah...I played gta4 to they point of excess. But games released start that have fallen flat for me. Love the look and promoter of RDR but quickly found it a bit of a grind do I avoided it's sequel.

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22 hours ago, grindmouse said:

 

Let them go (they won't) and use the money to fund new talent to replace them.


What money? It’s a tax break we’re talking about. It’s more a question of how much lost revenue the government is facing. They may well make the decision that it’s in the national interest to have Rockstar based in the U.K. when viewed in the round (if indeed that’s a factor in all this), but the main reason for the relief will be to stimulate the industry. 
 

It is nevertheless clearly mad that they are both claiming tax relief and paying zero corporation tax. 

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On 19/01/2020 at 12:32, Revival said:

You would have thought the Tax relief fund would be means tested, For Rockstar North to take £80 million in a period they've released two titles is absolutely disgusting.

 

It should be there to help small devs struggling to pay their rent not buy the CEO a new Lamborghini.

 

Thing is there are similar tax credits for film and TV. Tax credits are not actually there just to help struggling devs, but to encourage production companies with big budgets to base themselves here, because we like the network effect they bring. They tend to hire a lot of people on decent salaries, and bring a lot of money to local businesses. We are competing with the likes of Canada for their attention, because they also understand these benefits. It might be that when you look at the big picture it's all still quite difficult to defend, but it's worth remembering why these tax breaks were set up in the first place.

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