FCA concerns on Spreadbetting

luckystrike23

Active member
Mar 17, 2003
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#16
All accounts should be limited risk unless one is a professional client - this is in itself a problem because a provider could in theory easily get the client to agree (tick) that he's a professional client.

No one should lose more than the amount on his account - this would make providers think more carefully and be more responsible with leverage and margins. No one should be sued by a CFD provider because he lost a lot more than was in his account. All these stories about people who lost a lot from Black Swan events only tarnish the industry as they end up published in the media. And trading should not be gamified - some of those providers hide fees so its difficult to figure out exactly how much you are getting charged.

Lastly, these are specialised products not appropriate to advertise on the mass media - so no TV Ads and no football sponsorships.
 
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peakoil

Active member
Jul 1, 2008
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#17
With respect, to suggest that "all accounts should be limited risk" without regard for age, decades of experience and status, is something I could not be more opposed towards.

Nonetheless, as some of us are aware, the German regulator, on reviewing the spreadbet industry very recently stipulated that the industry should change so that persons should lose no more than the funds in his/her account. On the face of it, that might seem to be quite a fantastic proposition for all of us. Some might even see such as a "have cake and eat it" proposition, but it most certainly wouldn't be!

Firstly, let's not forget that all black swan events are as out of the control of any spreadbet company, as they are for you and me. In other words, people should also consider that to expect the spreadbet firms to take on the added risk of all potential black swan events, while continuing to offer the same slim spreads, and generous margins, we've all become accustomed to using, is just not in the slightest bit realistic. That is to say, limited risk accounts will, undoubtedly be subject to wider spreads, and more demanding margin requirements - at the very least. The spreadbet companies are running a business after all. Nevertheless, slim spreads, fast execution and current margin levels are all absolutely vital to experienced clients, otherwise spread betting would be nowhere near as attractive as it always has been.

Yet of course newcomers &/or anyone else who feels that limited risk suits their needs, should unquestionably be protected, or, at the very least - offered protection, at least until they have gained sufficient experience; however, those of us who have had accounts open for many years must be given the option to continue as we've done up to now, on condition that we unquestionably continue to accept the potential liabilities to which we are open.

As for the proposition that advertising must be prevented with regard to spread-betting, I can't see how that would work, or would stand up to legal challenge - especially if other forms of gambling are permitted to continue advertising - without additional restrictions. We're talking about an industry which, in its entirety is contributing around £2.3BN (2014 figures) to UK GDP, and has an economic footprint of around £5bn. Also, because of the vast amounts of money involved in gambling advertising, this poster frankly won't be holding his breath for any changes in this area - no matter how 'good' some of us may believe such to be... Then again, it wouldn't be a bad thing at all, if greater prominence were given to the indisputably true facts within * all * gambling advertising - ie., that the great majority will lose, and that help is available to those few who develop gambling problems - help which, I might add, should always be funded, at least in part, by the industry itself.
 
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Jul 8, 2014
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#21
What part of the HMRC rule don't you understand? forget it i am talking to morons

Dont be so fast to insult others, you have misunderstood the quote from HMRC all gambling Including spreadbetting is tax free even if it is your only source of income.

The 'carrying on of a trade' refers to other income linked to your trading, so if your selling courses and using your trading results as the marketing then all income becomes taxable. as you like your HMRC quotes here's another one for you.

''The fact that a taxpayer has a system by which they place their bets, or that they are sufficiently successful to earn a living by gambling does not make their activities a trade.''
 

forker

Well-known member
Jul 12, 2008
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#22
Dont be so fast to insult others, you have misunderstood the quote from HMRC all gambling Including spreadbetting is tax free even if it is your only source of income.

The 'carrying on of a trade' refers to other income linked to your trading, so if your selling courses and using your trading results as the marketing then all income becomes taxable. as you like your HMRC quotes here's another one for you.

''The fact that a taxpayer has a system by which they place their bets, or that they are sufficiently successful to earn a living by gambling does not make their activities a trade.''
If you are going to argue hmrc quotes agenst me you really need to be more thorough. Firstly where exactly in the legislation where it says carrying on or a trade does it refer to other incomes? It doesn't, you're adding that yourself because it isn't there.

To be clear your quote comes from hmrc manual BIM22015 where it also contains this

The taxpayer placing a spread bet is not normally carrying on a trade (see BIM22020)

Its in BIM22020 where it describes

To be taxable, the spread betting wins must come not merely from an opportunity presented by a trade, they must arise from the carrying on of that trade. Whether or not a particular spread bet is taxable will depend on the terms of the contract and the economic substance of what is done.


There is another thread where a ceo of a spread betting company has also answered this

http://www.trade2win.com/boards/spread-betting-cfds/220766-interview-highbury-fx-2.html#post2846802

So in short, you are speak a load of tosh. Do your homework and stop cherry picking to suit your opinion
 
Jul 8, 2014
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#23
If you are going to argue hmrc quotes agenst me you really need to be more thorough. Firstly where exactly in the legislation where it says carrying on or a trade does it refer to other incomes? It doesn't, you're adding that yourself because it isn't there.

To be clear your quote comes from hmrc manual BIM22015 where it also contains this

The taxpayer placing a spread bet is not normally carrying on a trade (see BIM22020)

Its in BIM22020 where it describes

To be taxable, the spread betting wins must come not merely from an opportunity presented by a trade, they must arise from the carrying on of that trade. Whether or not a particular spread bet is taxable will depend on the terms of the contract and the economic substance of what is done.


There is another thread where a ceo of a spread betting company has also answered this

http://www.trade2win.com/boards/spread-betting-cfds/220766-interview-highbury-fx-2.html#post2846802

So in short, you are speak a load of tosh. Do your homework and stop cherry picking to suit your opinion

The case of Graham v Green [1925] 9TC309 concerned a man whose sole means of livelihood came from betting on horses at starting prices. Rowlatt J says at pages 313 and 314:


spreadbetting is gambling, gambling profits are not taxable even if they are the sole source of income.

I will say no more on this matter, as you say everyone can do their own homework, not trying to convince anyone here just pointing out that you shouldn't be insulting the community here because you believe your view is the only one that's right.
 
Likes: timm

forker

Well-known member
Jul 12, 2008
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#25
because you believe your view is the only one that's right.
This isn't opinion, it's fact, on the hmrc site and any accountant in this area will confirm.
 

joseph1986

Well-known member
Feb 9, 2016
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#26
anyone can engineer themselves out of EU/US regulations and taxes
the problem is you have to spend money in the U.S./EU like you have no money
 
Sep 18, 2003
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#27
What part of carrying of of the trade don't you understand?
What part of being an imbecile don't you understand??
OldNoob has given you a completely reasonable and sensible explanation of the current situation re HMRC and spread betting.
You need to google "HMRC badges of trade" for further info if your brain can cope with that process
 
Likes: Fugazsy
Jul 8, 2014
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#28
What part of being an imbecile don't you understand??
OldNoob has given you a completely reasonable and sensible explanation of the current situation re HMRC and spread betting.
You need to google "HMRC badges of trade" for further info if your brain can cope with that process
Don't waste your time or stoop to his level of name calling Forker thinks that spread betting is a trade :rolleyes:
 
Likes: timm

forker

Well-known member
Jul 12, 2008
2,688
499
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#29
What part of being an imbecile don't you understand??
OldNoob has given you a completely reasonable and sensible explanation of the current situation re HMRC and spread betting.
You need to google "HMRC badges of trade" for further info if your brain can cope with that process
If you call translating continuing of a trade to having multiple income streams a reasonable answer then there is no hope for you either
 

forker

Well-known member
Jul 12, 2008
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#30
Don't waste your time or stoop to his level of name calling Forker thinks that spread betting is a trade :rolleyes:
It's listed under spreadbetting on the hmrc site! Nothing I am thinking just facts.

If people can't understand english or hmrc rules then you better hope your stupidity is taken into consideration when hmrc come knocking. Given that you are able to make any money in the first place