General / Off-Topic Big video games companies are exploiting UK taxpayers

[Para Handy]

From today's Grauniad:

Revealed: global video games giants avoiding millions in UK tax

Four large companies – including Sony and Rockstar North – have claimed close to half of all relief from a culture-focused tax policy

www.theguardian.com

Basically, a tax-break designed to encourage smaller and specifically British games producers is being used by the big multinationals to benefit themselves.

 

[Chris Simon]

Hate to burst your bubble, but EVERY big company evades taxes one way or another.

 

[Remus]

Hate to burst your bubble, but EVERY big company evades taxes one way or another.

Not for long tho' XD

Tax Alerts

Keep up-to-date on significant tax developments around the globe with EY’s global Tax Alert library.

www.ey.com

 

[Para Handy]

Hate to burst your bubble, but EVERY big company evades taxes one way or another.

The point is that the scheme is supposed to aid / assist / encourage British games producers but the majority of the benefits have gone to the multinationals.

"A UK tax policy intended to boost the domestic video games industry has been used by some of the world’s largest entertainment companies to avoid paying tens of millions of pounds in corporation tax, a Guardian investigation has found.

WarnerMedia, which owns the British game development companies that make the Lego and Batman: Arkham series, has claimed up to £60m in corporation tax relief, according to company filings."

"Sony, the owner of PlayStation, claimed almost £30m. Japanese multinational Sega claimed up to £20m, according to audits of its UK subsidiaries that make the strategy-based Total War games and the hit sports series Football Manager."
...........
"Close to half of all the relief went to four large foreign-based companies. Scores of games that have few, if any, apparent British cultural references have been awarded large rebates.

Official figures show VGTR was also overwhelmingly more lucrative for larger-scale video game projects. Claims for more than £500,000 have taken at least 80% of the total tax relief, despite accounting for only a small fraction of claims. These were dominated by big developers."
.............
"The revelations into VGTR come two months after the investigative think-tank TaxWatch UK found that the makers of Grand Theft Auto V, one of the most profitable entertainment products of all time, paid no UK corporation tax between 2009 and 2018. Its New York-headquartered parent company, Take-Two Interactive, claimed £42m in VGTR through its UK developer, Rockstar North."

 

[Chris Simon]

Not for long tho' XD

Tax Alerts

Keep up-to-date on significant tax developments around the globe with EY’s global Tax Alert library.

www.ey.com

No, maybe I shouldn't have said "avoid" as it implies illegal evasion.
That's not how it works. They are using completely legitimate ways to save on taxes. Ways that governments offer them.

It's only normal people and small businesses who have to pay taxes.

The fact that the government came up with a way to save on taxes for smaller guys is actually nice, but of course big companies will use this as well.

 

[Remus]

No, maybe I shouldn't have said "avoid" as it implies illegal evasion.
That's not how it works. They are using completely legitimate ways to save on taxes. Ways that governments offer them.

It's only normal people and small businesses who have to pay taxes.

The fact that the government came up with a way to save on taxes for smaller guys is actually nice, but of course big companies will use this as well.

That is the thing, though.

Those legal tools big companies use to avoid taxes, all the loopholes they abuse in order to avoid taxes. They will supposedly disappear once the new anti tax avoidance directives come into effect. At least that is the plan.

 

[Speedcuffs]

Expecting to see G4S register as a games Dev.
Yeh, I'm not laughing.

 

[Patrick_68000]

However the states recovers money with VAT on sales.

 

[Caramel Clown]

Wow what a surprise. Massive corporations use scummy business practices. I bet nobody would've suspected.

 

[Morbad]

However the states recovers money with VAT on sales.

The issue is less the total tax revenue and more where the money is coming from. VAT comes straight from consumer pockets, while corporations are able to pay far less than their intended share.

 

[K M Butler]

You can't actually tax a company. ANY tax is an expense. Prices are calculated as expenses+profit. Therefore, the customers are the actual victims of a tax. Tax on Tesco? Shop at Tesco? YOU are paying the tax. Replace Tesco with Ford Motor Co, Momandpop Banana Bonanza, Frontier Developments, ANY co. rinse and repeat.

 

[Robin of Spiritwood]

No, maybe I shouldn't have said "avoid" as it implies illegal evasion.

You were right. Tax Avoidance is the legal method, Tax Evasion is illegal.

 

[Patrick_68000]

The issue is less the total tax revenue and more where the money is coming from. VAT comes straight from consumer pockets, while corporations are able to pay far less than their intended share.

This is undeniably true. Although indirectly the consumers also pay the taxes on the companies.

 

[Patrick_68000]

You can't actually tax a company. ANY tax is an expense. Prices are calculated as expenses+profit. Therefore, the customers are the actual victims of a tax. Tax on Tesco? Shop at Tesco? YOU are paying the tax. Replace Tesco with Ford Motor Co, Momandpop Banana Bonanza, Frontier Developments, ANY co. rinse and repeat.

Yes, it is certain that business taxes are passed on to the consumer price.

We can see this with Amazon who threatens to raise prices to offset the GAFA tax.