Trading from home - employment status.

new_trader

Legendary member
6,197 1,261
The costs are greater with Spreadbetting - so you need a larger movement (in the right direction!) to make a profit. For very small profits ( such a day trading where presuemably you are looking for a lot of small profits) a CFD is better as the costs wont eat in your p&l as much, and of course what could be a profit under a lower cost CFD could be a loss in a spreadbet- in which case any tax due would be welcomed!!
Yes, probably because the Spread Betting company, who must pay taxes on profits, is passing on the cost to it's clients. But my answer is more general. The reason is that Spread Betting is non-professional and aimed at the public betting pennies or traders with mediocre aspirations. Professionals, I mean REAL professionals as opposed to full time traders, don't spread bet.
 
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CityTrader

Established member
665 26
Yes, given that when I took on HMRC I hired the UK Head of Personal Taxation from a global firm to present my case (he had a track-record of winning these arguments) and HMRC backed down from their initial position with me. It's quite sweet that you have such faith in the underlying fairness of governments though.
Ha, they saw you coming didn't they!! Dread to think what that cost you... So this individual, this UK Head of Personal taxation has a history of winning cases against the HMRC for individuals threatened with tax on their Spread betting wins? Love to hear about any mug punters who actually had to pay tax on their winnings? Or should I be looking on www.urbanmyths.com to find someone?
 
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CityTrader

Established member
665 26
The reason is that Spread Betting is non-professional and aimed at the public betting pennies or traders with mediocre aspirations. Professionals, I mean REAL professionals as opposed to full time traders, don't spread bet.

Bit of a sweeping statement! I was a market maker in The City for 20 years, and have punted for myself for the last 5 years, and I spread bet. What more would I have to do to be "REAL professional" ????
 

Bagehot

Member
74 10
Ha, they saw you coming didn't they!! Dread to think what that cost you... So this individual, this UK Head of Personal taxation has a history of winning cases against the HMRC for individuals threatened with tax on their Spread betting wins? Love to hear about any mug punters who actually had to pay tax on their winnings? Or should I be looking on www.urbanmyths.com to find someone?
Sorry, if you read my previous posts you'll see that this was not related to spreadbetting. It was an unrelated situation around residency. The point I was making was in reply to yours on the 'fairness' of individual tax cases. It cost me x and saved me 250x, so I was pretty pleased with the deal frankly.
 

A Dashing Blade

Experienced member
1,373 170
Why would someone trade with a Direct Access account when they can avoid paying taxes trading with a Spread Betting account? Can you explain this?
Futuresbetting.com are a direct access spreadbett company
 

new_trader

Legendary member
6,197 1,261
Bit of a sweeping statement! I was a market maker in The City for 20 years, and have punted for myself for the last 5 years, and I spread bet. What more would I have to do to be "REAL professional" ????
Punted :LOL:

Is that what REAL professionals do?

For a start
A 19 year old college kid with little money and no idea how to trade can open a spread-bet account with as little as £1-

To open a Direct Access account you need a minimum of US$5000. How many college kids does this rule out? How many members of the public does this exclude?

Do you honestly believe someone risking $100000/point would leave it in the hands of a Spread Betting company? C'mon, get real!

There are many other reasons and if you actually knew what's what and what's not you would agree rather than argue with me.
 

new_trader

Legendary member
6,197 1,261
How can they be direct access and a spreadbetting company? Surely the two are mutually exclusive?
They only offer bet sizes equivalent to the size in the underlying market because they directly hedge every spread bet. It’s all explained on their website. Their spread charge is 0.20 which is expensive compared to direct access. My brokers commission equates to 0.116 and I think that is expensive compared to some.
 

new_trader

Legendary member
6,197 1,261
I don't quibble about less that half a tick per round trip
Some people make 100's r/t in a day so to them it would matter because commission is nearly double. I was merely explaining that they are not direct access, they hedge exact amounts but that still doesn't mean they offer full transparency. In any case, I interpret the IR website as spread-betters would have to pay tax if they are doing it regularly and making enough to earn a living. According to IR definition, I cannot see a difference between spread-betting and direct access. Futures contracts do not pay dividends, they are generally not used as an investment and are used to hedge an investment.
 

nkruger

Established member
855 76
Bit of a sweeping statement! I was a market maker in The City for 20 years, and have punted for myself for the last 5 years, and I spread bet. What more would I have to do to be "REAL professional" ????
Can we presume, CT, that you don't pay tax on your SB profits ?
 

new_trader

Legendary member
6,197 1,261
Can we presume, CT, that you don't pay tax on your SB profits ?
nkruger,

This is what I found:

BIM22020 - Trade: exceptions & alternatives: betting and gambling: spread betting
The principles of Down v Compston [1937] 21TC60 and Burdge v Pyne [1968] 45TC320 (see BIM22019) apply equally here. 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.

For more on this see CFM13214.
 

new_trader

Legendary member
6,197 1,261
DO YOU PAY INCOME TAX?

Are there ANY 'Professional' spread betters here who can give a simple and honest answer to this question? Everyone seems to gloat about how their pretty indicator settings allow them to trade full time but getting an answer to this one simple question is like getting blood from a stone...

I suppose ignorance is bliss...maybe you can't really afford to pay tax :LOL:
 
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nkruger

Established member
855 76
DO YOU PAY INCOME TAX?

Are there ANY 'Professional' spread betters here who can give a simple and honest answer to this question? Everyone seems to gloat about how their pretty indicator settings allow them to trade full time but getting an answer to this one simple question is like getting blood from a stone...

I suppose ignorance is bliss...maybe you can't really afford to pay tax :LOL:

Maybe, NT, this should be a completely new thread in the tax part of these forums ?

And one I don't think many will answer (I do hope I'm wrong) as I think you've hit the nail right on its head.

My situation ?

Well, I've always been self employed, so I'm a year or so behind all those poor old PAYE people who have to pay their taxes every month, I wont be having the argument with the revenue 'til after April as I did not start SB ing full time until 2007.

I will post the results of the meetings and help any other members in any way I can.
 
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