HMRC needs to “urgently investigate” the developer, according to think tank.
Rockstar North has managed to pay pretty much nothing in corporation tax for almost ten years, according to an investigative think tank, TaxWatch UK (via Videogamer). The think tank reports that, despite making around $5 billion since GTA V released back in 2013, the developer hasn’t come anywhere near paying what it owes to the HMRC.
In fact, the report claims that Rockstar has actually made more money from the government, claiming an estimated £42 million from the Video Games Tax Relief Scheme in that same time frame. The scheme is set up to as a financial incentive for a studio to develop games in the UK, with a checklist of “culturally British” criteria needed to be met to be applicable for the scheme (because, y’know, GTA is a lot like living in Britain). The amount that Rockstar has claimed from the tax relief, according to TaxWatch, makes up about 19% of the overall budget for the scheme since it was introduced in 2014.
The tax relief scheme was, as you’d imagine, created to help games that would otherwise struggle to stand out on the international market. TaxWatch director, George Turner, told Gamesindustry.biz that the fact that Rockstar has been able to command such a large portion of the subsidised funds demonstrates “that the relief is not working as intended.”
In its report, TaxWatch advises the HMRC to “urgently investigate” the Rockstar discrepancy, though the HMRC explained to Gamesindustry.biz that “around half” of the largest UK businesses are under investigation, and refused to comment on whether Rockstar was subject to any such investigation.
It should go without saying that Rockstar has done pretty well financially in recent years. Previous reports claimed that around $1.092 billion was made from GTA Online alone since 2013, and Red Dead 2’s release saw a further $1.38 billion generated in the first quarter of the game’s release (October 26 – December 31, 2018). We’ll have to wait and see if the HMRC do take any measures against Rockstar, though at the very least we should see some revisions of the Video Game Tax Relief Scheme so that the liberties taken by Rockstar aren’t repeated – again.