stevespray
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How would you show your activities on a balance sheet?
Considering that spread bet winnings are tax free on an individual basis, why would you consider trading through a limited company? Surely the tax situation can not be improved upon?
Steve.
Considering that spread bet winnings are tax free on an individual basis, why would you consider trading through a limited company? Surely the tax situation can not be improved upon?
Steve.
A Dashing Blade
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The short answer is no, you'll have to take any profits out as dividends.
However . . .
. . . because you can offset start-up costs, data feeds and losses and you have limited liability in the case of a blow out!
So, learn the ropes by going limited, once you're profitable go via your personal account
However . . .
. . . because you can offset start-up costs, data feeds and losses and you have limited liability in the case of a blow out!
So, learn the ropes by going limited, once you're profitable go via your personal account
stevespray
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But....
As a company director you have an obligation to ensure that you act in a manner which means that you act in the best interests of your company. If you did have a 'blow out' and it was investigated then you could be struck off and your right to be a company director could be withdrawn.
Surely it is better to learn using a small bank on an individual basis. There are no real short cuts in this business. I've been trading for over 9 years and I still make mistakes which eat into my profits. The way I look at it is that I will never truely 'learn the ropes' as there is always more to learn.
Best bet imho is to open an account with some one like Finspreads and take full advantage of their opening offers. Use their materials and also the 2p per point trading which they allow. I think they also offer courses (at a reduced rate) with Sandy whatshisface which come with good reviews.
Steve.
As a company director you have an obligation to ensure that you act in a manner which means that you act in the best interests of your company. If you did have a 'blow out' and it was investigated then you could be struck off and your right to be a company director could be withdrawn.
Surely it is better to learn using a small bank on an individual basis. There are no real short cuts in this business. I've been trading for over 9 years and I still make mistakes which eat into my profits. The way I look at it is that I will never truely 'learn the ropes' as there is always more to learn.
Best bet imho is to open an account with some one like Finspreads and take full advantage of their opening offers. Use their materials and also the 2p per point trading which they allow. I think they also offer courses (at a reduced rate) with Sandy whatshisface which come with good reviews.
Steve.
Jbat001
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I don't want to put the cat amongst the pigeons, I just thought I might have something worthwhile to contribute.
I mentioned this on another thread (Capital Spreads, I think), that I had consulted with a tax technician at an HMRC office in Nottingham regarding a very similar situation. I was told that (on an individual basis), spreadbetting would be tax free if one had a 'subsistence income' from another source. Nothing preventing your SB earnings being greater than your other earnings, provided you have a 'subsistence income' from somewhere that is taxed. If you use spreadbetting as your prime and only income source, it will be liable to income tax - he was adamant on this issue. You may not wish to declare it on self-assessment, but that's another question entirely.....
For a limited company, I'm not sure how this would apply. Since all earnings of a company have to be declared (one of the duties of trading with limited liability), your trading profits from spreadbetting would have to be too. I can't honestly see how on this basis spreadbetting would be tax free on a limited company basis. You could set up a limited company membership that would be used by a number of individuals maybe, and their SB profits could be allocated on a tax free basis to their share of the overall profits through the dividend, but this is complex stuff. I don't see how the limited company entity itself could trade with any meaningful tax advantages.
Having said all this, I am keen to be proved wrong!
I mentioned this on another thread (Capital Spreads, I think), that I had consulted with a tax technician at an HMRC office in Nottingham regarding a very similar situation. I was told that (on an individual basis), spreadbetting would be tax free if one had a 'subsistence income' from another source. Nothing preventing your SB earnings being greater than your other earnings, provided you have a 'subsistence income' from somewhere that is taxed. If you use spreadbetting as your prime and only income source, it will be liable to income tax - he was adamant on this issue. You may not wish to declare it on self-assessment, but that's another question entirely.....
For a limited company, I'm not sure how this would apply. Since all earnings of a company have to be declared (one of the duties of trading with limited liability), your trading profits from spreadbetting would have to be too. I can't honestly see how on this basis spreadbetting would be tax free on a limited company basis. You could set up a limited company membership that would be used by a number of individuals maybe, and their SB profits could be allocated on a tax free basis to their share of the overall profits through the dividend, but this is complex stuff. I don't see how the limited company entity itself could trade with any meaningful tax advantages.
Having said all this, I am keen to be proved wrong!
TheBramble
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SBing through a UK Limited Company rather misses the point. Regardless of any issue of interpretation and implementation of HMRC rulings, which are various and seem to depend on your local geography, taxes on income derived solely from SB profits being liable to personal taxation or not are lost as you move into a corporate structure.
If you make profits through SBing or any other endeavour through a limited company, when you take money out of the company through salary or directors dividends, you will be liable for personal income tax and NI contributions. And corporation tax potentially on any balance. Plus the costs of incorporating, running and auditing the company.
Absolutely no benefit.
If you’re determined to make a living from SBing, and the very best of luck if you are, or think you are, your best route in my view is to go along with the assumption and received opinion that all profits from SBing are tax free. If you are pulled up my the forces of darkness, fight with all your energy and make nuisance – do not go down quietly. These goons have targets just like all pencil-pushers and if you’re causing them personally too much time, energy, frustration and grief, they are more likely to leave you alone and go after other, easier targets. Worse case is that they find against you and take what you would have paid them in the first place had you voluntarily offered up your hard earned gains to the offices of HM official extortionists. Plus maybe a fine if you take it too far. The trick, as always, is to gauge where you are in the process and when to cut your losses. And of course, to weigh up the probability of you coming to their attention on the first place.
If you make profits through SBing or any other endeavour through a limited company, when you take money out of the company through salary or directors dividends, you will be liable for personal income tax and NI contributions. And corporation tax potentially on any balance. Plus the costs of incorporating, running and auditing the company.
Absolutely no benefit.
If you’re determined to make a living from SBing, and the very best of luck if you are, or think you are, your best route in my view is to go along with the assumption and received opinion that all profits from SBing are tax free. If you are pulled up my the forces of darkness, fight with all your energy and make nuisance – do not go down quietly. These goons have targets just like all pencil-pushers and if you’re causing them personally too much time, energy, frustration and grief, they are more likely to leave you alone and go after other, easier targets. Worse case is that they find against you and take what you would have paid them in the first place had you voluntarily offered up your hard earned gains to the offices of HM official extortionists. Plus maybe a fine if you take it too far. The trick, as always, is to gauge where you are in the process and when to cut your losses. And of course, to weigh up the probability of you coming to their attention on the first place.
lurkerlurker
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What about "real" DMA trading through a SB wrapper
What about these offshore SB firms which hedge all client positions and offer almost market spreads? What if you are trading 20 contract YM positions with a 1 point spread through TwoWayFutures? That is $100/point. Say you make an average of 30 pips a day (net of losses) on the YM? (there are some traders who can do this consistently - 150 pips per week - and if they are that good, they will grow their capital until they are trading that lot size) You trade 5 days a week, all forty trading weeks of the year. Are you telling me the HMRC are going to let that go as "betting winnings" and let you pull down £300,000 a year without paying any tax or national insurance? Especially when the betting company is offshore and not paying UK taxes!
What if you were to do that for three years, growing your initial ~£200,000 to £1m. You could now risk around £5,000 per trade without taking on too much risk. What if you decided to trade 100 lots of the ES with similar performance? I've heard of futures traders pulling down as much as 40% a year on seven figure accounts. Are the HMRC going to let people take the **** that much, or would it be time to move to Monaco?
It it is tax free for the punter who makes £200 a week, I don't see how they can apply tax to someone who makes £20,000 a week.
Pretty unlikely examples (extremely successful futures trading through SB), but these DMA SB firms look pretty good. With the exception of placing orders inside the spread, I can't see an advantage of trading vanilla futures for a trader tax-domiciled in the UK.
What about these offshore SB firms which hedge all client positions and offer almost market spreads? What if you are trading 20 contract YM positions with a 1 point spread through TwoWayFutures? That is $100/point. Say you make an average of 30 pips a day (net of losses) on the YM? (there are some traders who can do this consistently - 150 pips per week - and if they are that good, they will grow their capital until they are trading that lot size) You trade 5 days a week, all forty trading weeks of the year. Are you telling me the HMRC are going to let that go as "betting winnings" and let you pull down £300,000 a year without paying any tax or national insurance? Especially when the betting company is offshore and not paying UK taxes!
What if you were to do that for three years, growing your initial ~£200,000 to £1m. You could now risk around £5,000 per trade without taking on too much risk. What if you decided to trade 100 lots of the ES with similar performance? I've heard of futures traders pulling down as much as 40% a year on seven figure accounts. Are the HMRC going to let people take the **** that much, or would it be time to move to Monaco?
It it is tax free for the punter who makes £200 a week, I don't see how they can apply tax to someone who makes £20,000 a week.
Pretty unlikely examples (extremely successful futures trading through SB), but these DMA SB firms look pretty good. With the exception of placing orders inside the spread, I can't see an advantage of trading vanilla futures for a trader tax-domiciled in the UK.