Hey everyone.
I’m on the iOS app for babypips so I wasn’t really sure where to put this but anyway.
I was wondering if anyone knew how tax works for forex trading as a full time job. I saw that there is a tax column in mt4 terminal window which sparked the question in mind.
This could also apply to part time trading as well and I would be trading from the UK
thanks for all your help,
Fibios
If trading is either your main source of income, or when accumulated with other sources of income which in total exceed the tax free allowance then it is taxable. Typically you will have to file your own tax return at the end of the financial year - as far as im aware the broker does not deal with the tax element of trading, this is your own responsibility. Regardless of spread betting, or trading on margin - tax is tax.
Spread betting is tax free in the UK, its technically gambling, so is not taxable, but really, you should talk to HM Revenue & Customs and the Citizens Advice Bureau.
Hope that helps.
Apex.
Spread betting, if done as a main source of income is classed as “professional speculation” with HMRC - a while ago I spoke with HMRC asking this very question. In a nutshell any source of income is taxable if it exceeds the tax free allowance in the UK. Spread betting providers do not help this matter with misleading advertising stating “Tax Free” (up to the tax free allowance)
Unless it has changed since then I would, as Apex said, check with a financial adviser.