Rockstar responded to TaxWatch, sending out the following statement to the press (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.
The UKIE (UK's Interactive Entertainment association) also criticized the TaxWatch report.
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.
Rockstar Games received as much as £37.6 million in Video Games Tax Relief from the UK's government in 2019 alone, according to a report from HMRC (Her Majesty's Revenue and Customs). Overall, since the VGTR program became active (April 1st, 2014), Rockstar received about £80 million, or a quarter of the entire tax relief.
According to TaxWatch, this means Rockstar didn't pay any Corporation Tax in the UK for the fourth year in a row. The development studio registered Red Dead Redemption 2 as 'Culturally British', which is a requisite to be considered as part of the relief. That's certainly a stretch, but then again TaxWatch previously pointed out that plenty of other games managed to pass this requisite and gain access to the tax relief regardless of whether they were really 'Culturally British' or not.
Another claim has been made by Rockstar beyond Red Dead Redemption 2, and that's believed to be related to Grand Theft Auto VI. It might be a while yet before Rockstar announces the game, though; after all, Red Dead Redemption 2 only debuted less than a year and a half ago.
Below we've added statistics from the HMRC report on the Video Games Tax Relief program.
There were 170 British video games completed in 2018-19 which claimed Video
Games tax relief (VGTR), with UK expenditure of £492 million. These figures are likely
to increase as more claims are received by HMRC. Since the relief was introduced in
2014, 1,075 video games have made claims, accounting for £2.6 billion of UK
Each game may make several claims during the production process. One claim can
also be made to cover several games. In 2018-19, 345 claims were made for a total
of £103 million, which represented 535 games.
Since VGTR was introduced, a total of £324 million has been paid out to 1,110 claims.
There is a very large increase in total and UK expenditure in 2018-19 due to a
small number of very high budget games.