Report claims that Rockstar benefited from £38 Million in UK video game tax relief

By Sean Carey,
Rockstar North, the company behind Grand Theft Auto V, has claimed £38 million in Video Game Tax Relief from HMRC according to the investigative think tank, TaxWatch UK. Last year, the think tank claimed Rockstar had effectively not paid any corporation tax in the previous ten years due to the company claiming millions in tax relief. GTA V has made more than $6 billion (on a $265 million budget) in sales since its release in 2013.

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Rockstar North's accounts for last year show that the company claimed £37.6 million in Video Games Tax Relief (VGTR), taking the company's total to £80 million since the programme was introduced. VGTR is a government scheme that allows game developers based in the UK to apply for tax relief funding, providing their games qualify as being "culturally British." For a game to be considered eligible, it must pass the Video Games Cultural Test which is administered by the British Film Institue.

According to TaxWatch UK, the £38 million claim from Rockstar North was the largest granted by HMRC in 2018/19, making up 37% of all claims made by the UK video games industry that year. 345 VGTR claims were made last year, with 315 of them being less than £1 million in total. Rockstar North's filing is worth more than all of the 315 claims combined. Out of the 1,110 claims made since the VGTR scheme was introduced, Rockstar has accounted for a quarter of all of those claims with just two of its games.

VGTR was originally introduced to help support smaller game developers and that it has cost the government an estimated £35 million a year. The Association for UK Interactive Entertainment (UKIE) The Association for UK Interactive Entertainment (UKIE)currently backs the programme; however, the £35 million a year figure, is being far exceeded.

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George Turner of TaxWatch UK told the Sunday Times, "It’s clear these figures show more evidence that the policy is not meeting the objectives when they were set out. The idea that 40pc of the relief would be claimed by one company is clearly absurd. "There is an issue of companies producing IP in the UK while not putting their profits back in."

A spokesperson from Rockstar told the Sunday Times that the relief was a "proven success" and "directly resulted in Rockstar significantly increasing its investment in the UK, creating well over 1,000 highly skilled jobs."

TaxWatch UK also believes that the claim relates to the production of a new GTA title. The report says, "The 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 V. Studios are able to make interim claims for VGTR before a game is completed, and the huge claims being put in by Rockstar is likely related to the production costs of GTA VI. 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 V."
Sean Carey
Written by Sean Carey
Hey everyone! I'm Sean. I have been writing gaming content for various outlets over the past few years while studying a degree in Journalism. I grew up on everything PlayStation — mainly Metal Gear Solid, with a brief foray into the world of Xbox. Nowadays, you'll find me mainly playing multiplayer PC games, but with the recent addition of the Xbox Game Pass for PC, I'm looking forward to improving my TA Score.