Exclusive:Anger over 'Grand Theft Tax' as game firm's tax relief tops half a billion pounds
UK government urged to review scheme’s use by ‘union busting’ firm
The Scottish video game company working on one of the most eagerly anticipated releases in history has now claimed more half a billion pounds in tax relief through a UK government scheme while paying out more than £400 million in dividends over the same period.
Newly published accounts for Rockstar Games UK, producers of the best-selling Grand Theft Auto series, show the firm received more than £70m in 2024/25 via the Treasury’s video games tax relief (VGTR) scheme.
In the same year, the Edinburgh-based firm, which is currently at the centre of high-profile legal action from a group of workers who claim they lost their jobs for attempting to unionise, registered profits of more than £87m, and issued dividends totalling £85m.
One Labour MP said many people would describe the firm’s use of VGTR as a “Grand Theft Tax,” while the Independent Workers' Union of Great Britain (IWGB), which is supporting the workers, called on the UK government to review the VGTR policy.
There is no suggestion of illegality concerning Rockstar’s use of VGTR. However, tax campaigners have repeatedly criticised the sums received by a company which, although based in Scotland’s capital, is ultimately a subsidiary of a US multinational.
Rockstar said that since the introduction of VGTR it has “invested enormously” in the UK, creating over 1,000 jobs. It also said it categorically denied the claim brought by its former employees.
Although it has been more than seven years since the initial release of Rockstar’s last title, Red Dead Redemption 2, the latest accounts filed with Companies House show the firm is continuing to generate vast sums of money.
It posted a turnover of £508m in 2024/25 - the fourth consecutive year in which it exceeded half a billion pounds - with a note in the accounts stating that the revenue arises from the “provision of research and development functions” to its New York-based parent firm, Take-Two Interactive.
Over the past decade, Rockstar has recognised cumulative profits of more than £604m, with its latest annual profits the second highest on record. At the same time, the company, which began life as DMA Design, a modest Dundee-based development firm, has made extensive use of the VGTR scheme, having claimed a total of £504m since 2015/16.
As well as detailing the £70.7m claimed in VGTR in the 12 months to March 31, 2025, Rockstar's accounts show it received interest income of £7m relating to late payments from HMRC for VGTR credits. The company also claimed more than £1.9m in research and development expenditure credits, another UK tax relief scheme.
The IWGB condemned Rockstar’s actions and said smaller firms were being disadvantaged by its use of VGTR. It has called on the UK government to review the policy to ensure that “any tax relief claimed by games studios follows UK law and treats their employees fairly.”
Spring McParlin, chair of the union’s game workers branch, said: “Rockstar have benefitted from nearly half a billion in public funds in recent years while their shareholders get huge dividend payments on the backs of their staff, who they sack on a whim for exercising their rights to unionise.
“This tax break is conditional on adhering to ‘British values’, which should not permit channelling taxpayer money to big businesses overseas, producing titles showcasing American landscapes and culture, whilst exploiting workers in the UK.”
Tracy Gilbert, the Labour MP for Edinburgh North and Leith, who has raised concerns in the Commons about the staff dismissed by Rockstar, said: “When a company benefits from tens of millions of pounds in government-backed tax relief, what many would describe as Grand Theft Tax, it is reasonable to expect that it upholds basic standards of fairness and respects workers’ rights.
“I have been contacted by constituents who believe they were dismissed for exercising their legal right to organise at work. These are serious allegations, and it is right that they are properly scrutinised, particularly when a company is receiving such substantial tax advantages.”
The latest HMRC data, covering 2023/24, shows £327m was paid out across 560 VGTR claims. Rockstar’s claim that year, worth £73.1m, accounted for nearly a quarter of the total relief.
The GTA series is one of the most lucrative franchises in entertainment, selling more than 455 million copies around the world. The latest instalment, GTA VI, is scheduled to release this November, and is expected to generate billions of pounds in sales in its first year.
The success of GTA and other titles has made Take-Two an attractive proposition for investors. Filings with the US Securities and Exchange Commission show that asset managers, the Vanguard Group and Blackrock, own close to 18 per cent of the firm's common stock. The Saudi Arabian Public Investment Fund owns 6.5 per cent.
A Rockstar Games spokesperson said: “Since the introduction of VGTR in 2014, Rockstar has invested enormously in the UK, creating more than a thousand jobs in the creative sector across Scotland and England. Rockstar’s commitment to local investment has helped put the UK at the cutting edge of entertainment globally and contributed significantly to UK economic growth, skills and innovation.”
On the issue of the employment dispute, they added: “Rockstar categorically denies the claim brought by its former employees. The Glasgow employment tribunal has this month rejected the union’s application for interim relief.
“We took necessary action against a group of individuals across the UK and Canada who discussed highly confidential information, including relating to game features from upcoming and unannounced titles, in an insecure and public social channel.
"We regret that we were put in a position where dismissals were necessary, but we stand by our course of action as supported by the outcome of this hearing."
The Treasury said it did not comment on the tax affairs of individual businesses.
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