Rockstar and UKIE respond to Taxwatch UK’s £37.6 million tax relief report

By Emily Gera, Monday, 20 January 2020 11:58 GMT

Rockstar and UKIE have responded to a Taxwatch UK report claiming the developer received £37.6 million in tax relief meant for smaller developers.

Update: Following the publication of this story, Rockstar reached out with a full statement, saying that tax reliefs have allowed Rockstar to create over 1,000 jobs in the UK.

“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,” a Rockstar spokesperson said.

The UKIE, the country’s games industry trade association, also took issue with Taxwatch UK’s conclusion, claiming in a statement that VGTR “works”, adding that the fund “directly supports” nearly a third of the country’s game development workforce.

“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,” it reads.

“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.”

You can ready the original story below.

Original story: The think tank has been monitoring Rockstar’s published taxes, and highlights that during 2018/2019 the game publisher claimed the largest claim for relief ever made – accounting for 37% of total tax relief claims across England’s games industry. According to their report, Taxwatch UK claims Rockstar has been granted £80 million under the program and has not paid corporate tax in 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 claim relates to the production of the next edition of GTA, rumoured to be scheduled for release soon,” the report continues.

“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.”

Last year the Grand Theft Auto 5 developer found itself under fire for issuing claims worth more than £42 million from the Video Game Tax Relief Fund between 2015 and 2017. At the time Rockstar only boasted “slender profits” in its accounts for tax relief, resulting in Taxwatch calling on the HMRC to investigate.

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