whatever you do, don't claim any losses you may make from spreadbetting against your taxable income or the IR will tax your spreadbetting profits
Just to add another angle:
I was made redundant almost 2 years ago and have been searching unsucessfully for employment.
I signed on and got Jobseekers allowance for 6 months. Since then I sign on once a fortnight and get my NI paid.
I determined 6 months ago to try and extend my trading. Up to then I simply had about £10k in a few shares. I have been seling/buying and making small profits (enough to pay the milk bill!). I have also been spending a lot of time learning the principles of SB and will shortly launch into the foray.
Will I still sign on? Possibly. Only proviso is that you have to demonstrate that you have been actively looking for work.
I was made redundant almost 2 years ago and have been searching unsucessfully for employment.
I signed on and got Jobseekers allowance for 6 months. Since then I sign on once a fortnight and get my NI paid.
I determined 6 months ago to try and extend my trading. Up to then I simply had about £10k in a few shares. I have been seling/buying and making small profits (enough to pay the milk bill!). I have also been spending a lot of time learning the principles of SB and will shortly launch into the foray.
Will I still sign on? Possibly. Only proviso is that you have to demonstrate that you have been actively looking for work.
Pringle said:
Cash? I assume you mean you pay by bank TT/ debit card whatever? Even so, I can't understand why. I remortgaged 15 months ago- increasing the size of my mortage to buy another property, I have at least 4 credit cards sucsessfully applied for , and 1 car loan - all this year, and I haven't been an employee for over 2 years!
'' I appreciate your point of view however, I disagree. I have decided that I do not have enough money for direct access (I would not consider Direct Access untill I have at the very least £100K).''
Kula, I can't agree with that.Having say 50k in say an etrade direct access account will give you the leverage to trade 500k worth of any uk stock.If you are any good at direct access trading (and with your experience, you ought to be at least capable), you really ought to be able to generate 50-100k worth of profits per year comfortably as a daytrader esp. as you seem to be doing well spreadbetting.
My advice, fwiw, is to start using direct access asap. Good Luck.
Kula, I can't agree with that.Having say 50k in say an etrade direct access account will give you the leverage to trade 500k worth of any uk stock.If you are any good at direct access trading (and with your experience, you ought to be at least capable), you really ought to be able to generate 50-100k worth of profits per year comfortably as a daytrader esp. as you seem to be doing well spreadbetting.
My advice, fwiw, is to start using direct access asap. Good Luck.
Just one point. If you made your life out of spreadbetting, the inland revenue can tell you that if this is your main income you have to trade thru a business and therefore you will be liable to pay taxes. But obviously, ask to an expert. It's always to be in the system and to operate thru a company. You will do your NI contributions, your bank will give you loans, etc.
CatTrader - I suppose they could tell you that, but anyone further up the daisy chain in the HMRC isn't going to pursue any recovery against you. It's simply gambling. The amount does (should?) not make a difference. SB gains are not chargable to IT or CGT. If I take £500 a week out of the markets through spreadbetting, and I do this for a year, and make £20k, that is not income or capital gains - its gambling. I would be technically unemployed (although not entitled to benefits because I would not be actively seeking work, and would have assets > £5k).
See the HMRC entry on Professional Gambing and also their take on financial spread betting - feel free to ignore their comment on the "economic significance" - betting is betting. £10 from the horses is as untaxable as £60m on the EuroLottery.
I am not a lawyer, tax professional etc. The above is merely a statement of opinion and does not constitute financial or legal adivce.
Hi Pringle. Hope it's still going ok. I would like to have, also, a letter from the IR stating my earnings are free from Income Tax. Was this easy to do ? Regarding my earnings - I have spoken to my accountant ( I had a business before I did this full-time) and he thinks the best way round is to produce a profit/loss account based on my bank account and statements from the 3 spreadbet companies I use. They will show how much I've earnt even though should not (?) be taxed. Banks and building societies should accept this, together with a covering letter from said bean-counter.
" BIM22017: 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"
Found this (thanks LL) on the Inland Revenue site - seems fairly conclusive ??
Found this (thanks LL) on the Inland Revenue site - seems fairly conclusive ??
This is an important point of technical law that should be noted. It is true gambling as such is tax free. However, if you are perceived to be a Professional Gambler, you are liable to pay income tax on the net result of your earnings. This is true whether you play poker, bet on horses or on the FTSE 100. The grey area, as always, is how is that distinction drawn by the inland revenue.
That seems contrary to my post (above) extracted from the IR website though. They say that if I am lucky enough to have a system that earns me a sum of money, it is not carrying on a trade, so therefore not liable to tax.
An individual that profits from speculation is not deemed a Professional Gambler because of his percentage wins or financial gains. A Professional is an individual who is gainfully employed in the industry and uses this knowledge to make profits. A seller of systems and or courses that enable others to profit from speculation who speculates in order to prove that these systems or courses work is also deemed to be a Professional Gambler.
No matter how profitable an individual gambler may be he/she cannot be taxed by the Inland Revenue regardless. There have not been any test cases in the courts to show otherwise and until the Revenue bring such a case (very unlikely) and win, it is pointless worrying about it. UK residents do not worry about the next volcanic eruption.
As has been pointed out before, if the IR taxed winnings, the 90% of people who lose would be able to claim their losses against their tax bill........
As has been pointed out before, if the IR taxed winnings, the 90% of people who lose would be able to claim their losses against their tax bill........
Sounds about right. The IR taxes profits, that's the way it works in any business venture. I am not a tax expert but I tend to agree with what police says. If you earn a living doing anything full-time then technically it is your profession and liable to income tax. You're a full time spread-better aren't you? Have you spoken to a professional accountant about your situation or are you just hoping you are right through your interpretation of the IR website? I take it you haven't by the way you say 'IF'.
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