Interactive Brokers have reduced their UK stock commissions. The new commission, excluding stamp taxes will be: £6 flat fee for trades up to the value of £50,000. For trades over £50,000 the fee will be £6 + 0.05% of the incremental trade value over £50,000. Subject to a maximum charge of £29.
Here's the full press release: Interactive Brokers (U.K.) Limited (IBUK) a group company of the Interactive Brokers Group, announces a new flat fee of GBP 6.00 (this includes brokerage, settlement, exchange, PMT levy and regulatory fees) per online transaction to trade United Kingdom shares i.e., up to a trade value per transaction of GBP 50,000, via IB's Smart Order Routing. IB's Smart Routing searches for the best firm price available at the time of your order, and seeks to immediately execute your order electronically. Trades executed via IB's Smart Order Routing exceeding a trade value greater than GBP 50,000 will be charged with a .05% surcharge for the portion exceeding GBP 50,000, with a maximum charge of GBP 29 per transaction. NOTE: UK Stamp duty will apply for all purchases and the aforesaid flat fee of GBP 6.00 only applies to FTSE shares denominated in GBP. For example: A Smart Order routed transaction up to 22,000 shares of BT priced at GBP 2.25 will cost IBUK clients GBP 6.00 only (22,000 shares x GBP 2.25 = GBP 49,500 transaction value, therefore it is less than a trade value of GBP 50,000 so it will only cost = GBP 6.00). A Smart Order routed transaction for 26,500 shares of BT priced at GBP 2.25 or less will cost IBUK clients GBP 6.00, plus GBP 4.81 = GBP 10.81 total cost for transaction. IBUK will charge 0.05% of the value of the transaction for directed trades to the London Stock Exchange, with a minimum of GBP 6.00 and a maximum of GBP 39.00 per transaction. According to Gerald Perez, Managing Director of Interactive Brokers (U.K.) Limited, "Today's announcement is not a promotional introductory offer rather the real deal. And it is another indication from IB that we are committed to being the trader's choice to electronically access world markets at less cost coupled with the industry's best trading platform."
This is still not competative due to the stamp duty problem. The direct access CFD providers e.g GNI, etrade e.t.c are cheaper for trading UK stocks. If you were to offer direct access UK stock CFDs at these rates then you would be the most competative in the market place. Since the difference between direct access CFDs and direct access stock trading is only contractual I do not understand why you have not done this. Without offering a CFD service you will fail to have any significant market share in UK equity trading.
Are CFD's for UK stocks basically a way to avoid stamp-tax costs for active trading? (in addition to leverage)
In a nutshell, yes. It is simply a contractual arrangement between the broker and the trader that avoids stamp duty whilst otherwise being identical to actually trading the stocks.