John,
Don't know about the tax but I used to work for Equifax - one of the two credit reference agencies in the UK.
Your credit file doesn't tell anyone whether you're employed / self employed or otherwise. Credit files are electoral roll (whether you're on it and for how long), CCJs and credit payment histories - what loans / credit cards etc you have, how much is outstanding, missed payments etc. Also fraud and property reposession registers.
It's only the lenders that take employment into account - you can have a pristine credit file with a very high score (like me) and still be refused credit (like me) if you're not a wage slave to an employer (like me)!!!
Cheers
Stakka
Don't know about the tax but I used to work for Equifax - one of the two credit reference agencies in the UK.
Your credit file doesn't tell anyone whether you're employed / self employed or otherwise. Credit files are electoral roll (whether you're on it and for how long), CCJs and credit payment histories - what loans / credit cards etc you have, how much is outstanding, missed payments etc. Also fraud and property reposession registers.
It's only the lenders that take employment into account - you can have a pristine credit file with a very high score (like me) and still be refused credit (like me) if you're not a wage slave to an employer (like me)!!!
Cheers
Stakka
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Stakka - interesting post.
Out of interest, how often are the records from things like credit payment histories, etc, updated - monthly, quarterly, etc?
Also out of interest, how are they scored - is there an overall percentage score, or individual scores for all the constituent factors?
Out of interest, how often are the records from things like credit payment histories, etc, updated - monthly, quarterly, etc?
Also out of interest, how are they scored - is there an overall percentage score, or individual scores for all the constituent factors?
Regarding the mortgage question the best answer is to go for a self certification mortgage.
I do them for people all the time.
You just sign to say you can afford the mortgage from your investment (trading income) and providing the figures are not absolutely silly you will get a mortgage.
The better lenders don't do any further checks.
Hope this helps
Nick
I do them for people all the time.
You just sign to say you can afford the mortgage from your investment (trading income) and providing the figures are not absolutely silly you will get a mortgage.
The better lenders don't do any further checks.
Hope this helps
Nick
Skimbleshanks,
Credit scoring isn't set in stone - 2 lenders could access the same persons credit file and get different scores. A person with a clean credit file (on the electoral roll, no arrears, no ccjs etc) will get a high score from a lender that wants that type of customer. The same person would get a low score with a lender looking for someone in debt / with ccjs / in arrears etc. In a nutshell, the credit company supplies the raw data and the lender decides on the score using their own criteria. No-one has a specific score as such.
Updates - electoral roll is once a year, all credit cards / loans / mortgages etc (any type of credit) is updated once a month. CCJs, property reposession, hits on the fraud registers are updated as when they happen.
Anyhow, if you trade for a living getting credit from the high street / big name lenders will be a problem. The info the credit agencies provide won't be the issue - it's how the lenders use it. The self cert mortgage route mentioned in the last post is a good idea (make sure you have at least a month for filling in paperwork!)
Stakka
Credit scoring isn't set in stone - 2 lenders could access the same persons credit file and get different scores. A person with a clean credit file (on the electoral roll, no arrears, no ccjs etc) will get a high score from a lender that wants that type of customer. The same person would get a low score with a lender looking for someone in debt / with ccjs / in arrears etc. In a nutshell, the credit company supplies the raw data and the lender decides on the score using their own criteria. No-one has a specific score as such.
Updates - electoral roll is once a year, all credit cards / loans / mortgages etc (any type of credit) is updated once a month. CCJs, property reposession, hits on the fraud registers are updated as when they happen.
Anyhow, if you trade for a living getting credit from the high street / big name lenders will be a problem. The info the credit agencies provide won't be the issue - it's how the lenders use it. The self cert mortgage route mentioned in the last post is a good idea (make sure you have at least a month for filling in paperwork!)
Stakka
Stakka,
Just out of interest what format did you pass on the raw data to the lenders. Is it:
1. in the same format that is sent to customers if they request their file and somebody has to manually interpret it
2. In a standard table format where it can be automatically processed by the lender or
3. The lender provides you with a formula which you then process on their behalf and return the score to them.
or perhaps something else.
John.
Just out of interest what format did you pass on the raw data to the lenders. Is it:
1. in the same format that is sent to customers if they request their file and somebody has to manually interpret it
2. In a standard table format where it can be automatically processed by the lender or
3. The lender provides you with a formula which you then process on their behalf and return the score to them.
or perhaps something else.
John.
John,
Both 2 & 3. The big lenders with 000s of applicants get a data feed in real time or in bulk overnight - automatically processed and scored. Smaller companies dial up to the 2 credit agencies and look at the data on screen and score it manually.
You can get your own credit file - www.equifax.co.uk and www.experian.co.uk. Costs £2 & shows *everything* held on you - you'll need all your addresses for last 6 years.
Stakka
Both 2 & 3. The big lenders with 000s of applicants get a data feed in real time or in bulk overnight - automatically processed and scored. Smaller companies dial up to the 2 credit agencies and look at the data on screen and score it manually.
You can get your own credit file - www.equifax.co.uk and www.experian.co.uk. Costs £2 & shows *everything* held on you - you'll need all your addresses for last 6 years.
Stakka
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Thanks Stakka - your post was an interesting insight into the workings of something which probably affects 99% of those on these boards at some stage.
To the original question:
THere is no income tax or capital gains tax to be paid on spread betting as it is classed as gambling, and as such is exempt from tax.
Also to get mortgages, the above posts are correct, you can go self cert, and there are now schemes where only 10% deposiits are required if the borrowing is under £500K. The interest rates are in line with normal mortgages as well.
Have a great day,
Steve
THere is no income tax or capital gains tax to be paid on spread betting as it is classed as gambling, and as such is exempt from tax.
Also to get mortgages, the above posts are correct, you can go self cert, and there are now schemes where only 10% deposiits are required if the borrowing is under £500K. The interest rates are in line with normal mortgages as well.
Have a great day,
Steve
Hi Steve,
Spreadbets are free from Capital Gains Tax.
There is no such exclusion from income tax in legislation. The IR could deem you to be a professional trader in which case all Spreadbet gains will be classed as income and taxed accordingly.
It would probably take £100,000+ to defend such a judgement made by the IR so for all practical purposes what they say goes.
JonnyT
Spreadbets are free from Capital Gains Tax.
There is no such exclusion from income tax in legislation. The IR could deem you to be a professional trader in which case all Spreadbet gains will be classed as income and taxed accordingly.
It would probably take £100,000+ to defend such a judgement made by the IR so for all practical purposes what they say goes.
JonnyT
So probably worth keeping a part time desk job that pays enough income to live off so that the tax return doesn't say income "nil" and raise a few alarm bells.
Presumably if you were declared a "professional spreadbetter" then you may also have to be some National Insurance payments as well. Class 2 I think it is.
If one traded futures instead - is that capital gains tax or income? Can the Inland Revenue declare you a "professional futures trader"?
Sounds as if the only way to pay no tax is to build up a million in your ISAs and PEPs and earn 10% a year on it.
John.
Presumably if you were declared a "professional spreadbetter" then you may also have to be some National Insurance payments as well. Class 2 I think it is.
If one traded futures instead - is that capital gains tax or income? Can the Inland Revenue declare you a "professional futures trader"?
Sounds as if the only way to pay no tax is to build up a million in your ISAs and PEPs and earn 10% a year on it.
John.
Futures gains can/will be classed as income in the same way.
There are ways to avoid NI such as trading through a limited company and only paying dividends, but making sure you have no employment contract with that Company. i.e. As the MD decide you don't have a contract and minute it!!!
JonnyT
There are ways to avoid NI such as trading through a limited company and only paying dividends, but making sure you have no employment contract with that Company. i.e. As the MD decide you don't have a contract and minute it!!!
JonnyT
If you had the right mix of earned and investment income you could still get almost £12,000pa tax free since the first £4,610 of earned income and £7,300 (?) of capital gains (from share/futures trading) would be tax free.
No doubt the savvy operators make full use of these in some way before giving the taxman his slice.
Chris
No doubt the savvy operators make full use of these in some way before giving the taxman his slice.
Chris
Definitely they can. I was told by v. well placed source a while back that Norman Wisdon (yes the same!) was in a snit with the revenue once after he made a bath load on the LME silver market. Argument was all about Schedule D (capital gains?) or straight income tax -- one paid less than the other, I suppose. The source said it was argued on the bold Norman's behalf that spec-ing on silver was his main source of income and he should be charged the lower of the two rates (as income vs capital gain). Recollection is that the Revenue didn't buy it. This is said in good faith, without malice and only to illustrate the discussion without prejudice etc just in case the bloke was pulling my leg.
CityTrader
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JonnyT - is that a fact about income tax and spread bets? I have asked my accountant, and he's looking into it..
I think you'll find the answer is probably quite straightforward:
a) profits from betting are no longer subject to betting 'tax'.
b) profits from a trade or profession are.
If your spread betting is sufficiently extensive to amount to a trade or profession your profits are taxable as income from that trade or profession.
a) profits from betting are no longer subject to betting 'tax'.
b) profits from a trade or profession are.
If your spread betting is sufficiently extensive to amount to a trade or profession your profits are taxable as income from that trade or profession.
CityTrader
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How does one distinguish "sufficiently extensive" ? Has anyone on here, made a living purely from Spreadbetting then found themselves subject to Income tax?
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