Late payment: Government proposals must confront the realities facing small businesses

By August 13, 2013 Press Releases

TIGA, the network for game developers and digital publishers, said today that the Government was right to address the problem of late payment but warned that imposing a fine on late paying businesses was unlikely to produce a significant change in business practices if it required suppliers to enforce the measure. TIGA made the comments following reports that Vince Cable, Secretary of State for Business, Innovation and Skills, was considering imposing a levy on businesses who fail to pay their suppliers on time.

 

TIGA research has previously shown that 26 per cent of developer and digital publishers have felt that late payment has held back their business from growing.  

 

Dr Richard Wilson, TIGA CEO, and a former Chairman of the Better Payment Practice Group (a private and public sector partnership that aimed to reduce the late payment of commercial debt), said:

 

“The Government is right to identify late payment as a serious problem for many businesses. Late payment of commercial debt has a negative impact on developers’ cashflow, causes developers to waste time chasing payments and can result in the closure of some businesses. Yet changing the UK’s payment culture will not be easy. Businesses already have a right to charge interest on the late payment of debt and late payers have been ‘named and shamed’. The Government’s suggestion that late payers could be subject to an additional fine is unlikely to shift the needle if it depends on suppliers initiating enforcement proceedings. Many suppliers already refrain from charging interest on the late payment of commercial debt because they do not want to upset their customers.”

 

Late payment of commercial debt has long been identified as a problem for small and medium-sized businesses, including games businesses. Last year, TIGA signed up to the Prompt Payment Code as part of a process to tackle the problem of late payment of commercial debt.

 

Notes to editors:

About TIGA:

TIGA is the trade association representing the video games industry. The majority of our members are either independent games developers or in-house publisher owned developers. We also have games publishers, outsourcing companies, technology businesses and universities amongst our membership. Since 2010, TIGA has won 16 business awards.

TIGA focuses on three sets of activities: political representation, generating media coverage and developing services that enhance the competitiveness of our members. This means that TIGA members are effectively represented in the corridors of power, their voice is heard in the media and they receive benefits that make a material difference to their businesses, including a reduction in costs and improved commercial opportunities.

 

For further information, please contact:

Dr Richard Wilson, TIGA CEO on: 07875 939 643, or email: richard.wilson@tiga.org

Drew Field, TIGA communications director on: 07720 643 344, or email: drew.field@tiga.org

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