he Edinburgh based games developer of the computer game Grand Theft Auto V, in trouble for a graphic torture scene in which there is graphic scenes of violence against women, is paying no UK corporation tax and instead is claiming millions of pounds in subsidies for the game’s contribution to British cultural life.
The latest available accounting reveal that the game’s developer Rockstar North based in Edinburgh paid no UK corporation tax in the 3 years to 31st March 2018. The company received in excess of £19m from the UK government in 2017/18 out of a total of £108m paid out in the form of subsidies to firms considered to be valuable to UK culture.
It’s parent company, Take-two Interactive Software are considered by many US politicians to be in part responsible for some of the school shootings in the USA. The computer game is set in a fictional American city awash with weapons and is also a favourite with British teenagers.
Rockstar North is one of the most successful entertainment productions of all time with global sales of more than 4.8bn. It has 3 ‘gamers’ on the rampage with guns and other weapons and has been the inspiration for part of Eric Davidson’s (the Edinburgh comedian) current show at the Edinburgh festival fringe.
Rockstar North is one of the most successful entertainment productions of all time
George Turner of the think tank Tax Watch said “It’s outrageous that the UK tax payer is being asked to shell out tens of millions of pounds in subsidy to the makers of Grand Theft Auto. This is a drive by assault on the British taxpayer”. He said that it was bizarre that Rockstar had been awarded the British tax break after it had already generated global revenues of billions of pounds for its American parent company.
Video games tax relief was introduced in the Finance Act 2013 and is worth up to 20% of core production costs. One of its aims is to promote British stories. The cultural test for the film break is administered by the British Film Institute (BFI). Out of a possible 31 points 16 are required for a pass. Cultural content accounting for more than half the marks, with additional points for development in the UK and using British staff members for the production.
Grand Theft Auto was introduced in 1997 having been developed by a team of writers and motion graphics editors in Edinburgh. Politicians and campaigners quickly criticised the game for depicting policemen being shot and prostitutes being kicked to death, and other characters being tortured. Undaunted Grand Theft Auto 5 was launched in September 2013 with sales exceeding £450 million in the first 24 hours.
The BFI used the ‘video games cultural test’ to certify it as British in October 2015. It was criticised for allowing scenes that show electric cables and sledgehammers to torture an alleged terrorist and this graphic horror show has been condemned by the White House in America but here we have a situation whereby the British taxpayer sends millions of pounds to the company to add to the already huge profits generated by global sales.
The BFI used the ‘video games cultural test’ to certify it as British in October 2015
The American parent company Take Two Interactive Software has made multi-millionaires of Sam and Dan Houser, the two British brothers who have driven the franchise. They both live in New York City.
A writer on the original Grand Theft Auto, Brian Baglo said that “it paid homage to British crime films of the 1960’s including Get Carter and the Italian Job and it had a subversive streak and a British way of looking at things tongue in cheek”
A British government spokesman said that “claims for tax relief were carefully scrutinised.”