Setting up as a trading business - UK?

Hello everyone,

This is my first post on the forum and I’m looking for a bit of advice. I have a trading strategy that I have tested and I am now confident in trading it with live capital. I am wanting to treat the trading as a business and eventually down the line approach investors. I live in the United Kingdom.

I’ve never been through the process of setting up a business, especially not in terms of trading so was hoping you could shed some light on the process and any tips. I will be trading CFD’s.

I presume I will need to set up as a sole trader at first and keep record of all my trades? I’ve heard benefits such as tax rebates too on items such as equipment but I’m a little unsure about that also?

Anyway, any help on setting up a trading business based in the UK would be most appreciated.

Thanks in advance,

This should be your first port of call

You’ll also need specialist legal advice from an experienced source, later, about “approaching investors”: there are all kinds of complicated securities/financial regulations over seeking investment from people (especially for those not formally licensed to do so).

The rules around tax implications for spread betting are not black and white. If you ‘dabble’ in a little then you should be free from any tax, however, if this is your full time occupation then HMRC will view this as taxable income.

You will need to set up as sole trader initially - assuming you are lucky enough to make a profit in your first year the HMRC will not have any issue in taking your tax off you if this is your primary job/income. However, if you make a loss then they will go down the ‘gambling’ route to avoid any tax rebate you would potentially be due back.

If the latter happens, then you have a legal argument for not paying any future tax on earnings to HMRC which is not a bad scenario, unless you need to show an income (for finance/mortgage applications, etc.)

There are several expenses you can offset against tax - commission, broadband, electrical equipment, financial/squawking subscriptions. If you own your own home then I would be careful about claiming a portion of your property for business use as this will lead to potential tax implications when you sell your home.

Hope that helps

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