Sony, Other Major Game Studios Accused of Dodging UK Tax

The British video game industry has a legacy of quality products from the Driver series to the more current Grand Theft Auto series. In 2014, when the British government implemented the Video Game Tax Relief (VGTR) many rejoiced as it was seen as a way to encourage independent developers to create more quality games. However, global companies such as Sony and SEGA have now been accused of avoiding hundreds of millions of pounds through the legislation and taking money from the independent community which the tax breaks were intended for.

The VGTR scheme is intended to help small-medium sized businesses. The fact that many conglomerates have many smaller developers in their make up makes the situation clouded and this leads to two lines of thought. The VGTR scheme needs to be reconsidered and amended or large conglomerates shouldn't manipulate the system by using their smaller developers to claim the financial relief.

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The tax relief is certainly important to the survival of independent developers. Yet, when the taxpayer is receiving a bill for over a hundred million pounds in order to support huge companies, the whole bill becomes a harder pill to swallow. This isn't the first time that larger gaming companies have come under fire for questionable practices. Female devs at Rockstar earn significantly less than their male counterparts and the company has been questioned about avoiding corporation tax for nine years. With 42 million pounds subsidised by the UK taxpayer for the creation of GTA V, it's understandable that some may not feel the money is going to intended recipients.


The flip side of this argument is compelling. It has been reported that for every pound spent in supporting the video game industry the economic return has been four-fold. If this is the case, then the advantages that large co-operations have made use of may be justified. Especially, with Brexit encouraging developers to move its business into the European Union.

The numbers are staggering and the likely result of the unintended benefits for conglomerates will be redefined regulation.  Unfortunately, this may make it harder for small to medium developers to claim their much needed financial support. This is at a time when loot boxes are being debated with the UK Digital Minister claiming they are not a form of gambling. The way gaming as industry changes in the coming years may very well shift with the conversations of gambling and tax benefits. Whatever the next steps are, many will hope that a national industry that has produced seminal games with its indie developers won't be damaged by the profits of larger global companies.

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Source: The Guardian 

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