Hi everyone,
I am about to make the big jump of giving up my full time job to trade forex but before I do I am after some advise about Tax and National Insurance. I am aware that spread betting is tax free and this is my primary source of income. However I must have to pay National insurance in some way and if I do I must declare myself as self employed do I state that I trade forex on a spreadbetting account? and do not declare any of my profits or is it best to trade via a dealer for minimum investment register a business and claim back expenses e.t.c and just declare my profits from these trades?
i have also looked into this and from what i have gathered spread betting is tax free as long as it is a supplementary income however if it is your primary source you would be classed as a “professional gambler” and you would have to pay income tax on your P/L
Ring up the Inland Revenue and ask about voluntary NI contributions - this is what you pay if you are self employed. If it is you only income, it is not tax free.
How long have you been trading for?
Hi San Miguel,
I have been trading for 4 years part time but never thought of doing it full time, it was just a hobby really, until the last year when i kept records of my profit and lose and realised that I was making the same as my full time income just trading about 30-40 pips a day. full time I plan to double my stake.
Thanks for the advise lee, I had a feeling that was the case.
It looks like the only way to avoid large tax bills is to keep spead betting as a secondary source of income.
i actually had a thought about this, if you use two brokers it would technically be two diferent sources of income right, so if you had say a �10k account with oanda and classed this as your primary income and had a secondary account of 9k with GFT ( a spreadbetting broker) which you would then class as your secondary income
if you then kept your trades and money management the exact same on both accounts your profit in your secondary account will be 10% less than your primary account which would allow you to pay tax on only your primary account
OR
as GFT has higher spreads than oanda even if you had two 10k account your oanda account will still result in more profit allowing you to label it you rprimary account
Possibly but the only who can answer this is a tax specialist.
I’m sure there are ways around it including setting up businesses and such. As for having 2 accounts I don’t know - it might still be lumped under 1 job type and therefore taxable.
