Rockstar Games paid no UK corporation tax between 2009 and 2018, despite receiving £43 million in tax credits, according to a new report.
Investigative think tank Tax Watch UK claims Rockstar companies made an estimated $5 billion (£4.1 billion) in operational profit during the nine-year period, which included the releases of Grand Theft Auto V and Red Dead Redemption 2.
Seven UK-based companies, using the names of Rockstar and parent company Take-Two, declared a total profit before tax of £47.3 million in the UK between 2013 and 2018, the report adds.
The latest analysis indicates that the £43 million claimed by Rockstar North in tax credits is equivalent to 19% of the total relief paid to the entire video games industry in the UK since the programme came into effect.
Grant Theft Auto V is one of the most successful entertainment products of all-time, having sold more than 110 million copies and continuing to earn millions from its popular online component.
Video Games Tax Relief was introduced in 2014 to provide support for games that were “culturally British.”
The TaxWatch report calls the situation “absurd” and claims that it raises serious questions as to whether the relief is being properly targeted.
The report also raises questions over Rockstar Games and Take-Two’s allocation of profit and the proper application of video games tax relief.
“Take-Two appears to believe that it is reasonable that close to 100% of the profit should flow to their US-based parent companies and senior management, while almost no profit flows back to the UK companies involved in either making or selling the game,” the report says.
George Turner, the director of TaxWatch, told The Guardian: “It is outrageous that the UK taxpayer is being asked to shell out tens of millions of pounds in subsidy to the developers of Grand Theft Auto, when at the time that the game’s developers put in their tax credit application Grand Theft Auto V had already generated several billion dollars in sales and profits.
“This is a drive-by assault on the British taxpayer and corporate welfare scrounging at its very worst.”
TaxWatch concedes that Rockstar and Take-Two’s allocation of profits is entirely legal. Rockstar Games is yet to comment on the report.