Woo
Well done rockstar! They paid no corporation tax because they paid the workers and so the tax man even gains more!
https://continentaltelegraph.com/business/chutzpah-thy-name-is-richer-over-rockstars-gta-v-taxation/
UK taxpayers funded Grand Theft Auto V maker to tune of £42m – while biz paid no corp tax and made billions
How "culturally British" is tax avoidance? Well, just ask Gary Barlow, Jimmy Carr and David Beckham, to name but a few. Now one "culturally British" games development house can be added to the list. Edinburgh-based Rockstar North – a subsidiary of NYC publisher Take-Two Interactive – is a household name thanks to the …
-
-
Monday 29th July 2019 19:45 GMT Anonymous Coward
That's fine, but
Why should they get tax subsidies? I would set up the programs so at a minimum a corporation can't claim subsidies in excess of actual taxes paid. If you have a balance of subsidy of 'x' and try to claim a tax loss, you could only claim refunds for losses above the 'x' threshold.
Its great that employees are getting the money, but are they all paying UK taxes? If they have offices in other countries, or they're working remotely (I don't know if Rockstar does that, but did the subsidy anticipate that?) then the UK gets nothing. What about the owners, I'm sure they get a lot of that money, are they paying UK taxes?
If you know for 100% certain that the UK treasury is getting the money back through personal income taxes maybe you decide you don't care. But still, why does the company deserve a subsidy? If the idea is to encourage companies paying wages in the UK in a certain industry, why not give the tax breaks directly to the employees? That would be a hell of a recruiting tool - work for us and you will not only get the salary we're offering but also a special tax credit from the UK government that reduces your tax bill.
-
Tuesday 30th July 2019 03:00 GMT Yet Another Anonymous coward
Re: That's fine, but
>I would set up the programs so at a minimum a corporation can't claim subsidies in excess of actual taxes paid
I'm not sure that works, if a company were making enough to pay corporation tax they probably wouldn't need a subsidy.
You probably just need to stop giving tax breaks to Hollywood studios and massive games companies - but I don't suppose Dales farmhouse cheese makers pay much in lobbying
-
Tuesday 30th July 2019 14:59 GMT Anonymous Coward
Re: That's fine, but
"Its great that employees are getting the money, but are they all paying UK taxes? If they have offices in other countries, or they're working remotely (I don't know if Rockstar does that, but did the subsidy anticipate that?) then the UK gets nothing."
To be fair, that's how corporation tax works anyway. If the costs associated with the sales originate in another country, it reduces your corporation tax liability.
-
Tuesday 30th July 2019 21:44 GMT Anonymous Coward
Re: That's fine, but
Yes, but why would you give tax incentives to a company if you won't get them back and more to make your government's "investment" worth it? If you don't get it back via corporate taxes and don't get it back via employee's wage/income taxes, then it was a bad investment and the tax credits should have gone to a company that would make more money and pay more in UK corporate taxes, or hire more people in the UK who pay UK payroll/income taxes.
-
-
-
-
-
-
-
-
-
Wednesday 31st July 2019 12:42 GMT jh27
Re: Woo
You don't pay both, on the same pound. Corporation tax is only paid on profit - money paid out in wages is not profit. The tax on money paid out in wages is generally more than that paid on profits, AFAICS
Regardless, Rockstar North don't make they rules, they just follow them. I don't think they've been accused of breaking any rules. IMHO, HMRC and the Government could make the whole system a lot simpler and fairer, but the people we've elected clearly aren't interested in that.
-
-
-
Wednesday 31st July 2019 18:42 GMT codejunky
Re: Woo
@96percentchimp
"Do you have any evidence that they paid their workers more while avoiding corporation tax"
I understand your scepticism but yes-
https://continentaltelegraph.com/business/chutzpah-thy-name-is-richer-over-rockstars-gta-v-taxation/
Also trickle down economics is only a belief? Thats a tough one to claim.
-
Wednesday 31st July 2019 20:30 GMT Anonymous Coward
Re: Woo
Also trickle down economics is only a belief? Thats a tough one to claim.
Well no, it's not a belief - it's a hoax obviously. Money given to the wealthy and large corporations stays in investments, it doesn't magically find its way to the less-well-off - it finds its way to offshore bank accounts. Remember who mentioned this nonsense - the political parties representing the wealthy.
Conversely, give a fiver to an unemployed 20-something, and they'll spend it, injecting more money directly into the economy and increasing the GDP.
-
Thursday 1st August 2019 11:02 GMT codejunky
Re: Woo
@AC
"Money given to the wealthy and large corporations stays in investments"
Ok, so what is an investment? You provide capital with the expectation of your capital plus interest. You invest to get more back. That is achieved by applying that capital to increasing productivity. This could be new products/services, more workers, better equipment, etc. So that invested money is put into the economy where it is invested.
"- it finds its way to offshore bank accounts"
What happens to the money in a bank account? It doesnt just sit there, it gets lent out by the bank into the economy.
"Conversely, give a fiver to an unemployed 20-something, and they'll spend it, injecting more money directly into the economy and increasing the GDP."
How many people does an unemployed 20-something hire? Do they hire a window cleaner? Do they take their car to a car wash? That isnt knocking the 20-something but instead of giving them £5 why not have that investment money sloshing around the economy and bring down the unemployment rate? that 20-something can now be employed and enjoy much more than £5 which they can use for food, shelter, clothing, transport etc and that is the economy.
I dont mean to knock your comment, a lot of people see that the money goes into a bank or the word 'investments' but without looking at what happens to that money from there. The economy is the bit after that.
-
Monday 5th August 2019 11:47 GMT RedCardinal
Re: Woo
The idea of "trickle down economics" was discredited as long ago as the 1980s. There's never been any evidence that giving tax breaks to the rich or to large companies provides any significant benefit to people further lower down the economic chain. Quite the contrary in fact, as various studies done over the years has never shown any evidence to support it.
It's a pity that it continues to be pushed.
-
Monday 5th August 2019 13:07 GMT codejunky
Re: Woo
@RedCardinal
"The idea of "trickle down economics" was discredited as long ago as the 1980s."
Really? I know misrepresentations (straw men) had been discredited but the proof of its existence is evident everywhere. An example being the mobile phone which is a huge battery attached to a huge handset with an extortionate call plan that nobody could afford but the rich and obviously will never be in the reach of the common man. It is a huge life changer for poorer countries too thanks to the rich countries with their disposable (yet too expensive for a poor country) phones!
Even those who have never worked in their lives (e.g. children) have them they are so disposable. How many of us can afford F1 cars and parts? Yet we all benefit from the developments in technology from that. Who benefits from the massive reduction in living costs? Food used to be a majority portion of a household budget with sugars and exotic foodstuffs being the thing of the rich. Even silk stockings.
-
-
-
-
-
-
-
-
-
-
-
Tuesday 30th July 2019 11:31 GMT Anonymous Coward
Re: Woo
They also have a bunch of dangerously biased and outright wrong brexit articles, including this golden nugget:
"Within a month of our departure from the EU, a small number of leftie activists will erect a co-ordinated vehicular sit-in somewhere on the M20. It will probably just be a few clapped out bangers and a few knackered trucks bought with Soros money.
In a nice little roadblock, they will stack the vehicles across all lanes of the M20, and then once the emergency services arrive to clear them away, they will use every means they can think of to delay the removal. The chaos caused by these hippie roadblocks will immediately be chararacterised as a Brexit issue." - https://continentaltelegraph.com/brexit/hippie-roadblocks/
The editor in chief is "29 Mar 2019 - 29 Mar 2019, 10:33am. Comment: The EU is shutting out views that do not chime with the Brussels elite. We can't leave too soon. Tim Worstall." - the very Tim Worst all of this very site.
If it wasn't for knowing that, I'd have assumed the site was parody.
Watch out for the Brussels Soros elite!
-
-
Tuesday 30th July 2019 11:46 GMT phuzz
Re: Woo
"They paid no corporation tax because they paid the workers"
Incorrect. They paid no corporation tax because they pushed any profits to Take2.
And as other people have noted, they could have paid all their staff very well indeed (and the income tax on those salaries) as well as paying corporation tax, and not claimed for tax relief, and still made a profit.
In fact, GTAV is (still) making them so much money, they could probably have paid twice as much tax (and salaries etc. etc.) and still made a profit.
-
Tuesday 30th July 2019 13:36 GMT ibmalone
Re: Woo
This is the problem. Regardless of how much tax a business is paying, whether they're in profit or not doesn't really matter so far as subsidy is concerned. The idea is to develop industry (which can be a successful company, but preferably a skill base and supporting businesses) and build a market, ideally one that somehow attracts foreign capital into the economy, or at least into a disadvantaged area. If they successfully do that then all is good, however if instead the reason no tax is being paid is that profits are being transferred offshore then there is a problem, because it suggests the money being attracted is not staying in the area.
-
-
-
-
-
This post has been deleted by its author
-
-
-
Monday 29th July 2019 17:14 GMT simonlb
Tax Avoidance?
Possibly, but if the system is broken then change the system so the loopholes which allow these thing to occur are closed. Don't call out people or companies who legitimately game the country's broken tax system for their own benefit, even if you think it's 'morally wrong' when it's still completely legal.
-
Tuesday 30th July 2019 11:12 GMT ratfox
Re: Tax Avoidance?
I assume this is the classical trick, where the UK-based business is paid like a third-party for the work they do, as if just any group of people picked from the street would create a product of the exact same quality.
What we see is that the creators of the game generating the income are British, and happen to be owned by an American company. What the accountants see is that the company producing the game is American, and have outsourced the work to a random outfit that they pay just enough to not go bankrupt.
-
Wednesday 31st July 2019 00:00 GMT Richocet
Re: Tax Avoidance?
These schemes are not usually completely legal. They are 90% legal, but they involve a step like inflating licensing fees or having the money pass through a secret shell company in a tax haven, and lying to the governments and tax offices about the ownership arrangements. Relying on the secrecy of the tax haven to prevent the lie being proven.
This is why the Panama papers were so significant. They proved that the actual arrangements were different to those reported to authorities.
A tax system that takes people's word and can only verify the truth if a secret tax haven discloses key information (which they are set up never to do) - is broken.
-
-
Monday 29th July 2019 18:40 GMT Excellentsword
Re: The FIFTH sequel?!
It's just easier to say fifth sequel of a core series instead of trying to explain why the one called 5 is actually the 15th Grand Theft Auto game. Vice City and San Andreas are period throwbacks to the '80s and '90s – intermezzos in the main timeline. There must be some kind of internal "lore" logic to the numbering, but I've already wasted enough time on this comment.
-
Tuesday 30th July 2019 21:20 GMT Trilkhai
Re: The FIFTH sequel?!
The numbering refers to the underlying engines, e.g GTA IV is the fourth generation, and its multi-platform expansions were The Lost and Damned and The Ballad of Gay Tony. If we count all of the Rockstar-produced GTAs that either were numbered or direct expansions/spinoffs using a numbered engine — which then includes Vice City Stories & Liberty City Stories (as platform is kind of irrelevant) — we end up with GTA V technically being the thirteenth game in the series.
-
-
Tuesday 30th July 2019 00:06 GMT Time Waster
Development costs
It’s easy to villainise companies for paying no corporation tax on seemingly enormous sales figures but it’s not always quite as simple as articles such as this make out. I haven’t looked at the actual figures but RockStar is potentially a good example of this. While worldwide, there’s little doubt they’ve made massive profits on this franchise. The UK, however, presumably makes up for a relatively small fraction of these sales. On the other hand, given the majority of their workforce is presumably based in the UK, I assume costs to this subsidiary are significantly higher than anywhere else in the world, naturally resulting in vastly reduced profits (or, as I assume from their zero corporate tax payment, a loss). There is not necessarily anything particularly immoral or sinister about this. In fact, were they to start booking profits from their other subsidiaries in the UK (in an attempt to pay more tax here), this would seem equally unfair to taxpayers in the countries these profits were made in (see the case of Amazon / Google / etc in the UK). Likewise, from the UK’s perspective, employing significant numbers of people here, resulting in higher costs, hence low / zero corporation tax is arguably much better than the Irish situation of booking all your profits there, paying trivial rates of corporation tax, whilst ensuring all your costs (i.e. staff / acquisitions / etc) are in higher tax jurisdictions where you would prefer to minimise profits.
The sanity of subsidising such companies with government handouts is another matter entirely, though I vaguely recollect at the time the general consensus was that it was a positive move in encouraging the industry to the UK and some concern that GTA might not actually qualify.
-
Tuesday 30th July 2019 03:15 GMT Yet Another Anonymous coward
Re: Development costs
That's hardly the point. The UK government essentially paid for the production of this game, the game was then sold worldwide and the profits all booked somewhere for the US parent to avoid US tax.
So apart from the number of kidney machines (or whatever the normal unit of government outrage) this cost the UK taxpayer, it also disrupts a lot of people's lives and careers.
The production moved to Scotland for this subsidy, next year when Montreal or Wellington or Vancouver offer a better deal, these people will be fired and a similar bunch hired there.
It also makes it difficult for other independent studios, who don't have the government covering their wage bill, to compete.
If Germany announced that it was paying all VW's production costs and letting them pay no tax - allowing them to sell cars for half the price of anyone else, there would be an outcry but movie and games studios expect it.
-
Tuesday 30th July 2019 11:56 GMT phuzz
Re: Development costs
"The production moved to Scotland for this subsidy"
No, to be fair to Rockstar, they've been based in the UK since they were called DMA Design back in 1984. (Yes the creators of GTA were also the creators of Lemmings). The only move was from Dundee to Edinburgh (and who can fault them for that?).
Hence part of the outcry, they've always been a UK company, making games in the UK, so deliberately moving their money elsewhere is a bit of a kick.
-
-
Tuesday 30th July 2019 05:20 GMT Allan George Dyer
Subtle insult?
'Tax Watch wryly suggested: "It is unlikely that the drafters of that guidance had in mind a game which allows the player to murder prostitutes when formulating the cultural test."'
So Tax Watch is saying that they don't believe that HM Government intended to promote Jack the Ripper as an important part of UK culture?
-
Tuesday 30th July 2019 07:30 GMT Flywheel
You've got it all wrong!
The Government (more specifically that Chris Graying chappy) subsidised it as they believed it was a transport training simulator for when Brexit kicks in and the Irish Backstop vanishes. It was designed to accurately mirror the predicted scenes at what used to be The Border.
-
Tuesday 30th July 2019 08:08 GMT mark l 2
its hard to see how Rockstar North could be consider to producing 'culturally British' titles when pretty much their main two titles developed over the last decade have been heavily U.S. influenced titles in GTA and Red Dead Redemption.
Ironically the one British spin off on GTA, London 1969 wasn't even developed by Rockstar North but by Rockstar Canada.
-
Tuesday 30th July 2019 08:57 GMT Potemkine!
Lawmakers prefer to have rich friends than poor ones
I read some believe the tax system is broken... on the contrary, it works perfectly, it was made to create these loopholes the richest ones will use to avoid paying their fair share. In that case, the legal scam is quiet perfect, because honest taxpayers will in the end give money to these Nation's burglars. The ones who designed it were clever, it took years before the scandal is made public.
-
This post has been deleted by its author
-
Tuesday 30th July 2019 11:15 GMT JDX
I wonder how they managed it
Tax aside - it's a separate issue - I wonder how on earth one of the most successful franchises managed to convince anyone they were a good awardee of £40m given their highly profitable track record.
There IS more to it than just CT because of the jobs involved (and huge amounts of corporate NI paid) but still it's pretty crass to take a huge grant and then pay 0. Sounds like they got a great person in their bidding department, but could hire someone in the PR department to advise on this sort of thing ;)
-
Tuesday 30th July 2019 14:03 GMT Anonymous Coward
Re: I wonder how they managed it
Well, they managed it because nobody bothered about the "cultural" bit. They all followed their orders and looked away. I mean, if you have a more or less cushy job, do you rock the boat? This carries a risk you might personally experience what it's like to be overboard. Now they'll spend another 10 years trying to establish what went wrong, spending more millions to do that - and failing miserably. No, I don't see a solution. Not one that will REALLY be applied; I've already lost any faith in human kind.
-
-
Tuesday 30th July 2019 11:44 GMT Anonymous Coward
Based in Scotland? What a surprise!
Why is anyone surprised a company in Scotland is following the Scottish MPs' lead in taking whatever they can get and giving nothing back?
The Scots claim that having a separate Parliament means they don't have to pay any attention to anything coming out of Westminster, but somehow they don't have a problem using taxes raised from English workers to fund their subsidized NHS hospitals and prescription charges, failing shipbuilding industry etc. If they really want Independence then they can start by paying back all the misappropriated funding they have had since "Devolution".
I won't hold my breath.
-
Tuesday 30th July 2019 12:34 GMT Michael Strorm
Ah yes... the Big Lie that the English were subsidising the Scots
It was revealed in 2005 that during the 1970s, the Westminster government had deliberately suppressed research that showed how hugely valuable North Sea oil was, estimating that an independent Scotland might be as prosperous as Switzerland. Both Labour and Conservative governments conspired in this.
You can see why they might not have wanted that information to be accessible to the rapidly-growing Scottish nationalist movement.
Instead, the vast majority of the money went to England and was squandered to- in effect- subsidise the Thatcher government's deindustrialisation and cover unemployment benefits, making the Tory policies look better than they were, keeping a government that was damaging to- and hated in- Scotland in power thanks to voters concentrated in the South East of England.
Even if the allegations in your comment were true rather than the usual typical weasel-worded anti-Scottish "subsidy" smear/propaganda ignorant of how government funding actually works, any figures you could allege to be involved in *that* would be made to look risibly microscopic by the de facto theft of Scottish oil over forty-plus years.
I won't hold *my* breath waiting for that back. Even if Westminster wanted to, they couldn't even begin to muster the funds involved.
-
Tuesday 30th July 2019 12:49 GMT Michael Strorm
Re: Ah yes... the Big Lie that the English were subsidising the Scots
Oh, and the addendum I wasn't able to add within the ten minute limit...
The worst of it isn't just that Scotland's oil was effectively stolen and wasted, it's that the money was used to prop up the Tories that most of Scotland was- and is- actively opposed to, and to lead us down an increasingly right-wing, English-directed path that ultimately led to Brexit and Boris Johnson as Prime Minister.
That's what believing the lies of the Westminster government got us. An imminent, economically-damaging Brexit we strongly voted against led by a calculating, self-centred hard right Tory with an intentionally-cultivated air of "loveable" buffoonery that let him slip past the political radar with the English as one of their own "eccentrics", but which (oddly) Scotland doesn't seem to have the same anaesthetised tolerance for.
And it was all done to us with the help of our own money.
-
-
Tuesday 30th July 2019 12:17 GMT maffski
Why do your research when you can get free PR by willful ignorance
Hidden in the tax watch 'research' are these weasel words...
'...and unnamed qualifying Rockstar employees...'
So it's not a 'how do we get the money out' scheme, it's an employee reward scheme. Rather common in industries where revenue can swing wildly.
'It is not known whether and how much UK income tax has been paid by the principals on these profit shares'
Except of course it wasn't just the principals. It was normal employees paying UK income tax on their bonuses. As income tax is higher than corporation tax there's a fair chance the UK arm of Rockstar was responsible for more tax payments than if it had retained profits and paid corporation tax.
Still, when your future as a think tank is governed by how many column inches of outrage you can generate then actual facts are just collateral damage.
-
Tuesday 30th July 2019 13:09 GMT Daedalus
Paging Lord Goodman....
Back in the day political influence was the way to divert subsidies meant to "enrich the culture" to more useful ends, like supporting the entertainment of the glitterati at the Royal Opera House, Covent Garden. Allegedly an important player in this game of gaming the then-named Arts Council was the bloated voluptuary Lord named above. He has gone onto his reward, but one suspects his acolytes are still playing the game.....
-
-
Tuesday 30th July 2019 22:16 GMT Trilkhai
Re: Grand Theft
That also describes most video games that take place in anything resembling civilization. The player is told that there's a big evil monster/person (who often isn't shown doing anything evil) they need to get rid of, and in order to do this, the player runs around honing their fighting skills by killing anything they can get away with killing, and earning money or gaining supplies by stealing from caves, buildings, dead bodies, or anywhere else they can find stuff — IOW, actively being closer to "evil" than the monster/person who spends the game waiting around for the 'hero' to show up.
To be honest, I'd never even seen any of the GTAs until last December, so I had the same basic impression you do. It came as a bit of a shock to learn that many of the later GTAs have a strong stance against drug use, drunk driving, homophobia, xenophobia, gambling, or hypocrisy, that they're packed with police officers & SWAT teams eager to enforce the law, and that some make it painfully clear that joining a gang or the mafia has devastating consequences for the person's innocent friends & family. (I was also very surprised when it turned out that players often spend at least as much time in the game on legal recreation like bowling, golf, dance/comedy clubs, etc. as they do on illegal activity.)
-
Tuesday 30th July 2019 23:11 GMT John Brown (no body)
Re: Grand Theft
"players often spend at least as much time in the game on legal recreation like bowling, golf, dance/comedy clubs, etc. as they do on illegal activity."
Although I take and accept your point, that's hardly a glowing testimonial considering the vast majority of us spend almost zero time on illegal activity compared to legal activities.
-
-
-
Wednesday 31st July 2019 02:05 GMT Anonymous Coward
,,,and that ladies and gentlemen is why we have austerity... to pay for corporation tax cuts. Never mind the deaths that have been caused by these cuts, as I say to my friends who vote Conservative 'enjoy your corporation tax cut' because that's what paid for it ! When you've held the hand of a relative dying in ICU because of Conservative cut backs, you have a different perspective on things.
-
Wednesday 31st July 2019 12:50 GMT Paul Smith
British Culture
"It is unlikely that the drafters of that guidance had in mind a game which allows the player to murder prostitutes when formulating the cultural test."
Oh, I don't know. Didn't his holiness JC, that god of all motoring knowledge (and former Top Gear presenter), once say that murdering prostitutes was the preferred proclivity for long distance lorry drivers?
-
Friday 2nd August 2019 13:41 GMT BuckeyeB
Corporations NEVER Pay Taxes
What bothers me so much is that people don't realize that no corporation pays taxes. Not "really." A corporation will treat a tax as an expense. A company that is profitable is going to make whatever percentage of profit they require to pass onto their shareholders. Therefore, if you raise a company's taxes(expenses) they will just raise their prices. So what that means is that YOU, the consumer, will pay higher taxes. All taxes are paid by people. A politician that says, we're not going to raise YOUR taxes, we're gonna tax the corporations is either lying, or doesn't understand economics.
Biting the hand that feeds IT
