A recent Guardian investigation into who is claiming tax exemptions from the British cultural tax relief program was published, titled: “Revealed: global video games giants avoiding millions in UK tax “. Established in 2014 as a means to promote the traditional cultures of the United Kingdom along with aiding small developers from the tax burden, it allows those that meet cultural criteria to claim 20% of their production costs as a tax wright off.
During the investigation it was determined that while a small number of smaller studios were benefiting from the program has intended, over 80% of the claimants were major instead international publishers. Specific culprits mentioned were: Sony at £30 million pounds, Warner Media at upwards of £60 million pounds, Sega at £20 million pounds, and Take Two Interactive off of GTA V at £42 million pounds, and as a company they haven’t paid taxes in the UK from 2009 to 2018 according to Tax Watch UK.
Of the £324 million pounds handed out in tax relief we only know of where a fraction of that went. Despite a 2016 ruling by the European Commission that all tax relief totaling more than €500,000 euros must be publicly disclosed for transparency on government websites, the United Kingdom’s government has opted to entirely ignore this ruling for the program. Without an extensive investigation we will not know what other major corporations are benefiting from this program, but it is a safe guess to assume if the publisher has a European studio they are probably benefiting from said tax relief.
Qualifications for the program appear to be an insanely simple matter of just having a studio in Europe, not just the UK, but Europe and using the English language. Past those two qualifications the only other requirement is small consolations, such as in Triangular Pixels’ case of just adding the Cornish language as an option in their game.
A more cynical and skeptical person might say what Alex Dunnagan, a researcher at Tax Watch UK, has said…
“[…] become a cash cow for large, tax-dodging multinational corporations who are milking the system to extract hundreds of millions of pounds in subsidies from the British taxpayer.”
Remember all this next time one of these corporations wants to call you a “freeloading toxic entitled gamer”.
Unlike them you pay for your lot in life, not milk entire countries for all they’re worth only to ruin people’s livelihood at the mere mention that their free ride may come to an end.