Are all my spread bet profits tax free?

Leemo, any chance you could expand on what advantages trading through your own company brings?
I assume then before this you were paying normal income tax and national insurance, losing your personal allowance between 100 and 120 k pa etc.

Thanks, T
 
Leemo, any chance you could expand on what advantages trading through your own company brings?
I assume then before this you were paying normal income tax and national insurance, losing your personal allowance between 100 and 120 k pa etc.

Thanks, T

I don't trade through a company, the person I was corresponding with does. There are advantages to being a director of a limited company, not least the ability to pay dividends which do not attract national insurance
 
I've seen the HMRC advice jon, followed your links and did own Google searches. Its just that I don't trust them.

It would be more than nice to hear from someone with £100k SB profits who was pronounced tax-immune. Or someone with no job or business but £20k SB profits who was taxed on the £20k.

Until then, we're all talking in theory aren't we?

don't hold your breath ;)
 
Leemo, any chance you could expand on what advantages trading through your own company brings?
I assume then before this you were paying normal income tax and national insurance, losing your personal allowance between 100 and 120 k pa etc.

Thanks, T

hey F / all

I really really don't want to get back into the mix on this fascinating thread ..........the opinions differ (as usual) but my own view is the standard one ....expect Sh*t happens and go with the flow

F / anyone - any comments around the incorporation approach..?

i'm just looking at some options at the moment .......it is likely my main income stream will swing across to my trading income this tax year and I want to be upfront and fair re Tax ........but at the same time I want to ensure i'm not overpaying or missing legitimate benefits

N
 
hey F / all

I really really don't want to get back into the mix on this fascinating thread ..........the opinions differ (as usual) but my own view is the standard one ....expect Sh*t happens and go with the flow

F / anyone - any comments around the incorporation approach..?

i'm just looking at some options at the moment .......it is likely my main income stream will swing across to my trading income this tax year and I want to be upfront and fair re Tax ........but at the same time I want to ensure i'm not overpaying or missing legitimate benefits

N

Morning N

You have reminded me I must get back working on this topic again and of course answer the questions asked by Timsk - that he looked upon as being more conclusive on what after all is a very "grey" area.

Obviously - I don't know your own tax circumstances - but the main first question to ask you is - Have you in the past been fined by the HMRC ( old Inland Revenue) for not declaring your full income - or been involved in any Tax investigation - whether individually or as a Director of a Limited company ??

If your answer is NO - and you have a clean history - that's half the problem out the way for a start and therefore favours you being able to spreadbet and take advantage of your so called "winnings" ( not profits ) on a tax free basis.

My own problem which I have already highlighted in this thread previously was that I was on the so called "hit list" as I had been initially fined by the IR over 25 + years ago for all silly things - such as having personally having 2 mobile phones ( one was for non business and my company was paying for it) and running family cars on my company and taking advantage of mileage allowances etc etc - so ended up having to pay additional taxes along with penalties and fines etc. ( They can be a lot more than the actual tax owed )

To make the matters worse I was then investigated then another 5 yrs later ( OK I was a multi millionaire at the time ) and found guilty of other minor Tax discrepancies on the buying and selling of other businesses - and fined fairly heavily.

From then on - its basically I am an easy target and would always be under the HMRC "microscope" during my working life - with another investigation going on maybe this next 6 months.

Next question - Have you been paying any tax on any FX trading profits you have had during the last say 10 yrs ??

If you have - but it was not your main source of income - ie you paid more tax on your own other services side - It could be looked upon that its was of no great importance.

However if you have for example paid £10K + tax in the last 2 or 3 years from FX trading and now to decided to go full time and do it all through spreadbetting and not pay any other income tax - then the HMRC will have a problem with that - as they did with me.

I had ideally wanted to pay tax via my FX trading that was not via a spreadbetting company ( at the time it was with FXCM in the US ) but for every say £1 per pip
I traded there - I wanted to trade 50 time larger via UK spreadbetting company ( at the time GFK UK ) and not pay any tax on my winnings.

Because its was related ( connected - see that latest link you have already mentioned ) and I was looked upon as not an "occasional punter" who paid tax via my proper full time work - the HMRC at Birmingham would just not entertain it.

Here's me being an hypocrite - I dont like Banksters and Tax Evasion etc etc - but as far as I am concerned Tax Avoidance for 90% of the working population is legal and OK . My analogy is speeding - ie we all might break the speed limit by say 5 or 10 mph at some time - but the Police are not going to send you to jail etc - but break the speed limit by double or treble - then you should have the book thrown at you.

I can however understand that if I was only paying say £5k per annum income tax from declared trading - and then making £70 -300K income ( winnings) by doing exactly the same thing but via spread betting and not paying any Tax on it then the HMRC are missing out on say £20 -100k of additional annual revenue off just one trader.

As you I am sure know - the majority of spreadbetters lose money - so pay no tax anyway and then maybe the 10 -30% who did win over a period of a Tax year - already pay income tax via their main form of income - ie via there normal day job - ie being a Fireman / Office worker / Salesman / Doctor etc etc.

The HMRC have not got the time or resources to discover every Trader who might not be totally truthful - and of course it make sense to just ignore they guys who get away with just £2/ 3k per year and go after the full time traders who are playing with a lot larger accounts. If you are going to fall into that category - get the proper and latest advice from a Tax Expert ideally employed by one of the Top 5 accountancy firms. It will cost you - but better to be safe then sorry - as I found out ;-)

Hope that helps N


Regards


F
 
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thanks F.............the actual thread here is a grown ups thread and worth reading from start to finish ...everyone has valid points that are bring put forward ..........and lots to learn (and ponder ) from all angles............gamekeepers poachers - whatever

in my opinion when I have consulted the HMRC on some points of tax (a few times over the years in my adventures) they have generally been vague and pointed me to generalisations which in truth were not useful.....so I then took advice and followed whatever seemed the logical and transparent course of action...declaring to them what I had done through the standard annual return processes....

can I also say I have never been under investigation by the HMRC and aim never to be .....hence my interest in this thread as I anticipate changes to my income streams in this tax year and want to be up front and transparent in my dealings with the HMRC........

I have some old friends and colleagues who have over the years decided to challenge certain principles with them and come a very poor second .....something I have no intention of doing as life is hard enough without more complications ...........

as F and others say on this thread you may in your heart think you are in the right .........but the HMRC hold the cards and your life will be an expensive and timely pain in the ar*e proving your point............ and you will always then be on their naughty list even if you do win (doubtful)

and another very valid point for me gleaned from here is that the past does not reflect the future .............look at the frequent government changes (meddling) with all policies ..........and the HMRC are no exception........what is legal or unchallenged today can be made illegal and then enforced if it will generate more revenue for the HMRC than the resources consumed in pursuing it

that's simple cashflow principles .........and we all know the government likes to make a few quid

thanks again - good thread

N
 
Tax Avoidance

Whilst the Income tax treatment of Spread betting is grey (and it is prudent for traders to put aside an amount to cover income tax demands in the future), what is very clear is that traders trading directly onto the markets on standard "non spread betting" platforms, where companies then, post trade, create a "spread bet" for the sole purpose of tax avoidance is very clearly wrong and will be dealt with.
HMRC have been clear about a couple of points:-
1) Blatant tax avoidance schemes like the one above are going to be clobbered.
2) Anyone who thinks they can earn a living in the UK and pay no income tax is deluded
 
Whilst the Income tax treatment of Spread betting is grey (and it is prudent for traders to put aside an amount to cover income tax demands in the future), what is very clear is that traders trading directly onto the markets on standard "non spread betting" platforms, where companies then, post trade, create a "spread bet" for the sole purpose of tax avoidance is very clearly wrong and will be dealt with.
HMRC have been clear about a couple of points:-
1) Blatant tax avoidance schemes like the one above are going to be clobbered.
2) Anyone who thinks they can earn a living in the UK and pay no income tax is deluded

Terrible advice. Anyone thinking or knowing that their situation is taxable by HMRC, hoping they don't come calling is a big risk.

They could end up paying a tax rate of either 60% or 100% depending on their tax bracket, plus compound interest.

They would also have the higher trading costs of using spreadbetting brokers and the problems of being 'A' booked.

Much better to ring HMRC and get clarification on their situation from the start I would have thought.
 
Agreed, sadly, and as you will see from the thread asking HMRC is "Spread betting" exempt from income tax will be told "Yes" and people think whoopee. But there are additional questions, can I use my current DMA platform and have it converted into a spread bet for the sole purpose of avoiding Income tax? No, Can I earn a living in the UK and pay no Tax? No. The problem is people her do not "think or Know their situation is taxable by HMRC and that is the problem, salesmen are misleading them, companies are misleading them and yet they have an opt out in the small print which says traders are responsible for their own tax advice. The question asked was the one I have listed above but it is not the right question.
 
You was saying spreadbetting was taxable and advising traders to put money aside in case of a tax investigation.

I was merely pointing out the maths and risk in that action for members who read this thread and think 'whoopee' and dive straight in making 10% a day.

Again HMRC are extremely helping when contacted.
 
Not exactly, what I was saying was, if you are trading on a normal DMA platform and your clearing company is manufacturing a spread bet post trade, or you are making a living from Spread betting rather than, as HMRC see it, just putting on a spread trade as a hobby, then you had better not assume it is tax free and put capital aside for the bill when it comes. "Spread betting" as a leisure activity is not taxable we are all agreed with that. So I am not saying "spread betting is taxable" and I am advising traders that are in the above two, those trading on Direct market access platforms and those making a living from spread betting that they would foolish to assume HMRC will not be after them and they should make provision for that. But again I stress these are people that have been misled into thinking they can trade as they always have done and post trade have a "spread bet" artificially created to avoid tax and those making a living and thinking they can pay zero tax. Spread betting as a leisure time activity is tax free, currently.
 
Not exactly, what I was saying was, if you are trading on a normal DMA platform and your clearing company is manufacturing a spread bet post trade, or you are making a living from Spread betting rather than, as HMRC see it, just putting on a spread trade as a hobby, then you had better not assume it is tax free and put capital aside for the bill when it comes. "Spread betting" as a leisure activity is not taxable we are all agreed with that. So I am not saying "spread betting is taxable" and I am advising traders that are in the above two, those trading on Direct market access platforms and those making a living from spread betting that they would foolish to assume HMRC will not be after them and they should make provision for that. But again I stress these are people that have been misled into thinking they can trade as they always have done and post trade have a "spread bet" artificially created to avoid tax and those making a living and thinking they can pay zero tax. Spread betting as a leisure time activity is tax free, currently.

The reason all the spreadbet companies must make their own prices is to satisfy the thing as a bet between them and you. Thus you cannot be trading DMA and spreadbetting.

Spreadbetting is not taxable at the moment, even if it is your sole source of income. The only danger of it being taxed is if it is regarded as linked to some other business activity - eg: selling share systems/tips - when the spreadbetting income may be considered as part of the whole business and thus taxable. Otherwise you're ok (unless they change things of course :devilish:)
 
This question has been going on for years with the same questions and same answers from those who are typically not making any money from the markets, therefore the question is irrelevant in 99+% of cases. The other (less than) 1% would surely seek advice from the horses mouth so to speak. The outcome is also the same - peoples opinions will not change and neither will their trading balances. If peoples opinions do not change then the markets stay predictable and the people who play it get caught up each and every time and lose their money to the smart guy who does.
Let me try and give another spin on this to spice things up a bit.

Dont worry about having to pay any tax to HMRC as the spreadbetting companies will end up taking 100% in over 99+% of cases.
 
This question has been going on for years with the same questions and same answers from those who are typically not making any money from the markets, therefore the question is irrelevant in 99+% of cases. The other (less than) 1% would surely seek advice from the horses mouth so to speak. The outcome is also the same - peoples opinions will not change and neither will their trading balances. If peoples opinions do not change then the markets stay predictable and the people who play it get caught up each and every time and lose their money to the smart guy who does.
Let me try and give another spin on this to spice things up a bit.

Dont worry about having to pay any tax to HMRC as the spreadbetting companies will end up taking 100% in over 99+% of cases.


You party pooper you!!! :LOL:


I was really indulging in the prospect of not paying any tax on my hypothetical earnings and you've just gone and ruined my day.

Y u no go n get sum kofeee. Chee u up and maye hairs grow on u head if u r lucky :cheesy:
 
. . . But again I stress these are people that have been misled into thinking they can trade as they always have done and post trade have a "spread bet" artificially created to avoid tax and those making a living and thinking they can pay zero tax. Spread betting as a leisure time activity is tax free, currently.
Hi Parky,
Can you give an example of a broker who offers this facility please? I ask as I don't know of anyone doing this, although there are an increasing number of spread betting firms who are edging closer to the DMA model.

One such broker that I'm considering switching to and currently have a demo account with is InterTrader Direct. As you will see if you visit their site, it's a spread betting provider who offers their version of direct market access, along with no 'dealing desk' execution via automated ECN/STP processing. However, as Jon points out in his post above, although they offer some of the advantages of a DMA broker, they remain a spread betting firm and I will still be trading with/against them and any profits I make will be tax free.
Tim.
 
You party pooper you!!! :LOL:


I was really indulging in the prospect of not paying any tax on my hypothetical earnings and you've just gone and ruined my day.

Y u no go n get sum kofeee. Chee u up and maye hairs grow on u head if u r lucky :cheesy:

Sorry Atilla, didn't mean to pi55 on your party whistle :)

One thing I do know is that you can never change these peoples minds - that's most people most of the time. Humans are incredibly predictable and need I say it, on many occasions very stoopid and will simply and willingly follow the herd.

The last time of major stupidity in its masses was the run on the U.K banks when the government had already declared savings were 100% protected, in fact there was no safer place on earth at the time that your money would be guaranteed 100% safe. Still people would draw out millions daily only to stash under the bed. I wonder how many people were followed home by unfavorable characters.
 
Sorry Atilla, didn't mean to pi55 on your party whistle :)

One thing I do know is that you can never change these peoples minds - that's most people most of the time. Humans are incredibly predictable and need I say it, on many occasions very stoopid and will simply and willingly follow the herd.

The last time of major stupidity in its masses was the run on the U.K banks when the government had already declared savings were 100% protected, in fact there was no safer place on earth at the time that your money would be guaranteed 100% safe. Still people would draw out millions daily only to stash under the bed. I wonder how many people were followed home by unfavorable characters.


Somebody once mentioned there is a special form for spread betters declaring income or lack of to the HMRC.

Without having to read the whole thread if somebody can supply the form ID I'd like to hang it up on my wall.

Many thanks in advance (y)


(y)
 
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