Rockstar defends UK tax relief claims

Both Rockstar and UKIE have moved quickly to respond to a new report that claims Rockstar reaped another £37.6 million in Video Games Tax Relief last year, making up a sizeable 37% of all UK games industry tax relief claims – which are supposed to be aimed at helping smaller devs.

Taxwatch UK has been keeping a close eye on Rockstar, who have apparently now claimed £80 million in UK tax relief since 2014, and who have paid precisely zero UK Corporation Tax in the last four years.

“It can’t have been the intention of the government in setting up the scheme to spend vast amounts of the VGTR budget on one, vastly profitable company,” said George Turner, director of Taxwatch UK. “The evidence is now clear that there is an urgent case for reforming VGTR.”

The report also indicates that Rockstar’s recent claim “relates to the production of the next edition of GTA, rumoured to be scheduled for release soon.”

“This is clear because the company has not registered any other games as being ‘Culturally British’, the pre-requisite required to qualify for the relief, since GTA 5. Studios are able to make interim claims for VGTR before a game is completed, and the huge claims being put in by Rockstar are likely related to the production costs of GTA 6. As VGTR is related to production spend, the large claim indicates the scale of Rockstar’s next release, which is likely to cost far more than the $137m spent on GTA 5.”

Rockstar has now defended its VGTR claims to date (via VG247):

“The UK’s program to support the growth of a broad range of creative industries through tax relief is a proven success. The program has directly resulted in Rockstar Games significantly increasing its investment in the UK, creating well over 1,000 highly skilled and long term jobs across London, Lincoln, Yorkshire and Scotland.

“This investment and the success of British video games supported by the program not only significantly contributes to the economy, and to UK tax receipts, but also helps solidify the UK’s position at the forefront of video game development well into the future.”

Industry trade group UKIE has also released a statement following Taxwatch UK’s assertions:

“Video Game Tax Relief (VGTR) is a forward thinking policy that shows the UK understands the significance of games as a leading creative industry. We know that VGTR delivers a great return on investment for the taxpayer. For every £1 invested into the games industry via VGTR, it pays back £4 in gross value add into the economy.

“But even more importantly, VGTR directly supports 4,320 high productivity full time jobs in game development roles – nearly a third of our entire development workforce – across the country.

“This helps businesses based everywhere from Dundee to Brighton to play on the global stage, while allowing local communities to benefit from great jobs fit for a digital age. The UK enjoys a global reputation for creative excellence in game development. Now is the time to continue to support an industry that drives inward investment, exports globally and provides a world beating showcase of the skills the UK has to offer.”

GTAV has racked up over £6 billion in sales since it launched in 2014.

Wireframe #30 is out now

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