Hi, I am a UK-based futures trader who does this full-time. My account is small but, may I say, mighty I am fast becoming a consistent trader. I am averaging a 18% return with a 4% drawdown, over several months. I absolutely know it's early, but I quit my job to pursue this, and I am now making around half of what I used to make at a city job. I expect the account to grow and quickly catch up with my previous salary as I learn more. By next April, when I file my tax, which I expect to do as a Sole Trader and not as an incorporated entity, can I classify my revenue as income and not capital gains? I have no income at the moment other than this trading revenue.
Thanks, Any chance you know what happened with Kyte's ibet - that let you trade futures packaged in spreadbetting?
My strong advice, unless you have other income (like rents or working spouse) do not give up the day job (or the search for a new day job if in between jobs) Keep the day job and trade on the side and claim trading profits as capital gains. The top rate of tax for a Sole Traders is effectively 42% for profits above 50K and 47% for profits above 100K when you include 2% NI as well. Capital gains is only 18% although that might change under the next Government.
haha quite a indictment on UK tax system if this is true... discouraging entrepreneurship... my hunch though is there are work arounds.