Credit card companies have been warned by the Office of Fair Trading that their late payment penalties are excessive and do not reflect the true costs banks incur. This follows the Treasury review of banks and their charging systems reported back in October 2004 http://www.accountingweb.co.uk/cgi-bin/item.cgi?id=132594
The OFT are threatening the card issuers with enforcement action to protect consumers if undertakings are not given on fees or otherwise address its concerns.
For tax purposes, are these late payment penalties an allowable deduction? It depends on who is the cardholder, and who forced the late payment error in the first place.
Sole traders and partners will often use private credit cards for business expenditure. Those with cash flow problems will use credit cards as an expensi...