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Sony and Activision over UK tax breaks

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kowenicki said:
Khuutra said:

Cheeky, yeah, but it's a legitimate bargaining tool on their part.

What costs the UK more money: these studios paying lower taxes, or these studios leaving and paying no taxes on top of producing no income for the UK populace?

probably a close call as the parent is in japan.

either way in the current climate I'd call their bluff.

Man how is that a close call? Does Media Molecule pay its own taxes for operating in the UK? What I'm saying is that if Media Molecule up and left, it would remove part of the active work force, take away all the taxes they were paying, and remove a source of exported income for the UK(!).

Media Molecule being relocated to Vancouver would cost the UK a lot more money than MM paying lower taxes, and that's a pretty strong bargaining chip.

I don't think the government will give in either, but that doesn't mean it's not legitimate on Sony and Activision's ends.



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kowenicki said:
Munkeh111 said:
Khuutra said:
kowenicki said:

Cheeky bastards.  Why should I as a UK taxpayer subsidise Sony?  anyone?

Well if Sony move all the UK based studios abroad I will start a boycott Sony thread.

As we are looking at cuts and savings, then I'd rather a gaming subsidy was dropped than pretty much anything else.... as would any right thinking human being.

Cheeky, yeah, but it's a legitimate bargaining tool on their part.

What costs the UK more money: these studios paying lower taxes, or these studios leaving and paying no taxes on top of producing no income for the UK populace?

Lower taxes, but boosting their government income in the long term with more UK investement

or lower taxes allowing the parent to invest more in their emerging markets operations... there are no guarantees.

Well Sony have shown their desire to do business in the UK, and it is not just these companies, but also the only remaining British publisher (I think) Codemasters

The real question is, why does the film industry get subsidies, but the games industry does not?



Khuutra said:

Man how is that a close call? Does Media Molecule pay its own taxes for operating in the UK? What I'm saying is that if Media Molecule up and left, it would remove part of the active work force, take away all the taxes they were paying, and remove a source of exported income for the UK(!).

Media Molecule being relocated to Vancouver would cost the UK a lot more money than MM paying lower taxes, and that's a pretty strong bargaining chip.

I don't think the government will give in either, but that doesn't mean it's not legitimate on Sony and Activision's ends.

Technically a game like Little Big Planet is a Japanese export, not a U.K. export because it was produced by people employed by a Japanese company. The profits and therefore taxes in a majority sense are already Japanese, and their going overseas is only a loss in the sense of losing some moderately to high paying jobs. Its definately not the same as Rockstar for instance who AFAICR are locally owned and operated and therefore pay taxes on the entirety of their taxable profits.



Tease.

Khuutra said:
...

So you're saying that if companies see the UK as a suboptimal environment, then they should leave the UK as a place of business?


Oh, yes. That's why I hate the way news items of 'X company is moving manufacturing to Poland' are presented as if that was a terrible thing; a slight to British people; and something the government should interfere in to stop.

The real issue is that 1hr of unskilled labour costs tens of times more in the UK than abroad. Due to historical reasons, better workers' rights/protections here, and the high cost of goods. I'd like to see that equalise as the rest of the world adopts (roughly) our laws and rights.



Squilliam said:
Khuutra said:

Man how is that a close call? Does Media Molecule pay its own taxes for operating in the UK? What I'm saying is that if Media Molecule up and left, it would remove part of the active work force, take away all the taxes they were paying, and remove a source of exported income for the UK(!).

Media Molecule being relocated to Vancouver would cost the UK a lot more money than MM paying lower taxes, and that's a pretty strong bargaining chip.

I don't think the government will give in either, but that doesn't mean it's not legitimate on Sony and Activision's ends.

Technically a game like Little Big Planet is a Japanese export, not a U.K. export because it was produced by people employed by a Japanese company. The profits and therefore taxes in a majority sense are already Japanese, and their going overseas is only a loss in the sense of losing some moderately to high paying jobs. Its definately not the same as Rockstar for instance who AFAICR are locally owned and operated and therefore pay taxes on the entirety of their taxable profits.

Correct.

Media Molecule export nothing. 



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Link: Shipment History Since 1995


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kowenicki said:
Squilliam said:
Khuutra said:

Man how is that a close call? Does Media Molecule pay its own taxes for operating in the UK? What I'm saying is that if Media Molecule up and left, it would remove part of the active work force, take away all the taxes they were paying, and remove a source of exported income for the UK(!).

Media Molecule being relocated to Vancouver would cost the UK a lot more money than MM paying lower taxes, and that's a pretty strong bargaining chip.

I don't think the government will give in either, but that doesn't mean it's not legitimate on Sony and Activision's ends.

Technically a game like Little Big Planet is a Japanese export, not a U.K. export because it was produced by people employed by a Japanese company. The profits and therefore taxes in a majority sense are already Japanese, and their going overseas is only a loss in the sense of losing some moderately to high paying jobs. Its definately not the same as Rockstar for instance who AFAICR are locally owned and operated and therefore pay taxes on the entirety of their taxable profits.

Correct.

Media Molecule export nothing. 


Income tax, we do want people employed dont we



kowenicki said:

Cheeky bastards.  Why should I as a UK taxpayer subsidise Sony?  anyone?

Well if Sony move all the UK based studios abroad I will start a boycott Sony thread.

As we are looking at cuts and savings, then I'd rather a gaming subsidy was dropped than pretty much anything else.... as would any right thinking human being.

 

 


I'm pretty sure you would start a boycott sony thread anyway no matter what they do....

Anyway on topic Sorry Sony&Activision  this for once may be a battle you cannot win, the UK is in huge debt and everything is getting cuts thanks to the overspending made by labour over the past 15 years...



it's the future of handheld

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The official Vita thread http://gamrconnect.vgchartz.com/thread.php?id=130023&page=1

Munkeh111 said:
kowenicki said:
Squilliam said:
Khuutra said:

Man how is that a close call? Does Media Molecule pay its own taxes for operating in the UK? What I'm saying is that if Media Molecule up and left, it would remove part of the active work force, take away all the taxes they were paying, and remove a source of exported income for the UK(!).

Media Molecule being relocated to Vancouver would cost the UK a lot more money than MM paying lower taxes, and that's a pretty strong bargaining chip.

I don't think the government will give in either, but that doesn't mean it's not legitimate on Sony and Activision's ends.

Technically a game like Little Big Planet is a Japanese export, not a U.K. export because it was produced by people employed by a Japanese company. The profits and therefore taxes in a majority sense are already Japanese, and their going overseas is only a loss in the sense of losing some moderately to high paying jobs. Its definately not the same as Rockstar for instance who AFAICR are locally owned and operated and therefore pay taxes on the entirety of their taxable profits.

Correct.

Media Molecule export nothing. 


Income tax, we do want people employed dont we


of course... but that doesnt justify a tax break imo.    By all means give tax breaks to British gaming companies where they develop, create and export from a UK base and ALL revenues are taxed in the UK. 



I'm not really here!

Link: Shipment History Since 1995


Squilliam said:
Khuutra said:

Man how is that a close call? Does Media Molecule pay its own taxes for operating in the UK? What I'm saying is that if Media Molecule up and left, it would remove part of the active work force, take away all the taxes they were paying, and remove a source of exported income for the UK(!).

Media Molecule being relocated to Vancouver would cost the UK a lot more money than MM paying lower taxes, and that's a pretty strong bargaining chip.

I don't think the government will give in either, but that doesn't mean it's not legitimate on Sony and Activision's ends.

Technically a game like Little Big Planet is a Japanese export, not a U.K. export because it was produced by people employed by a Japanese company. The profits and therefore taxes in a majority sense are already Japanese, and their going overseas is only a loss in the sense of losing some moderately to high paying jobs. Its definately not the same as Rockstar for instance who AFAICR are locally owned and operated and therefore pay taxes on the entirety of their taxable profits.

Damn. You sure showed me, then.



 I believe the video game industry here in the UK has (one of) the highest contribution to the economy to total employees ratio. It's been one of the industries that continued to grow / show success over the years and suchlike, and the government is risking losing it with this. 

 As said, there is without a doubt a huge risk Bizarre, Rockstar, Sony Studios and all will simply move to Eastern Europe or Asia in the next 5 or so years, as it's just cheaper. Much much cheaper. Then our politicians will be scratching their heads when yet another contributor to our economy isn't contributing at all.

 Whether Tax-Reliefs is the best method / incentive the UK needs to do something to remain competitive in attracting what has been a successful industry to our country, and currently we're quite simply a far less attractive proposal. I can see this yet again being another UK industry lost to the global market in a decade or so.