CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 64 % of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

DO UK TRADERS PAY TAX? [Video & Links]

Hello everyone. I recently came across this very informative video by a trader named Jason Graystone about taxes that UK traders need to pay. This is such a grey area in the UK and this video helped me to gain some real clarity on the subject.

Jason interviews two gentleman in this video. Firstly, Stuart Lane gives an overview of the CFD/Spread Betting market. Then Jason speaks to Andrew Wilson, who really breaks down the tax that UK traders have to pay and what key aspects traders need to be aware of in order to save money and not get in trouble with the law in terms of hefty fines.

To view this video click here [The Andrew Wilson Tax specific part starts at MIN 19:32]

After watching the Jason Graystone tax video, I conducted some further research into this area and found this good article titled Trading Taxes in the UK which breaks this subject down into key reference points which are easily understandable.

To view this article click here

Finally, for those of you reading who may not know where to locate your Tax Reports, Darwinex provide a guide on this via their help page.

To view this guide click here

Hopefully this information may be of some benefit for the Darwinex community. I have found it hard in the past to find specific information relating to Tax that traders pay, so feel it is important to share this knowledge.


Trading tax profits HMRC declaration can be confusing - basically, any profit above the new HMRC ‘self employed’ (SE) threshold of1K is declarable as additional earnings, unless you use an SB platform which DX doesn’t offer as yet. HMRC allows you to add this income via a ‘self-employed’ category on their website - via a self assessment return (SA). The same PAYE income-tax-free allowances apply to SE and you need to be earning a LOT before being hit by higher taxes, if you are lucky enough to be in that position. The SA return will also require you to include your PAYE income as part of the overall SA return…very simple to complete. Therefore HMRC online self-assessment (SA) makes it very easy to submit your TOTAL income via their website and calculate any extra tax, which is payable the following year, unless you start earning big time, when they may insist on upfront payments. You must register as a self-employed sole trader when you know you have forex profits >1K, but the forms are very simple and take less than an hour or so to complete, with fail-safe error checking as you go. Best to register and start early in the tax year and save basic info to the HMRC site until you have your final P&L figure at the year end - which DX can provide as already discussed. AS a rough guide add your PAYE and SE income together - deduct tax free allowances and then use the HMRC website to work out the tax due on what’s left…but the SA does all this for you anyway…


@ marketserpent - Thanks for the extra clarification. I agree with you, this is all a bit confusing. I myself am going to hire an accountant that has experience within the trading field when the time is right.

Hi, from what I’ve read around, it it depends on your position.

Like marketserpent said if you’re Spread Betting then it’s classed as gambling and currently tax-free like lottery winnings.

But then it seems there’s 2 ways to go about it for CFDs, if you class yourself as a “trader” and that’s your main income, you plan to live off your earnings and see it as a self employed business you would go through the self employed route.

However if you have a different main income, and looking to “invest” i.e. keep reinvesting your money, then you would not class yourself as a self-employed trader but as an investor so go down the Capital Gains Tax route. HMRC say if you dispose of any asset, or sell it, then you should declare the profits or losses. And a CFD is classed as one of those assets.

This has some benefits though, because you have a £12k tax-free allowance which is separate from your income’s tax-free allowance. Above that you’ll pay either 10% or 20% depending on if you’re basic or higher income tax band.

The other benefit is that if you have a losing year, then your losses can be carried forward to the next (4yrs I think) years to offset any future profits to try and bring them back into the tax-free allowance)

One further point I’m actually wanting to find out myself… If you invest and hold onto say 1 darwin (to make it simple) for 3 years. How does darwinex treat that… is it one CFD contract in that Darwin for 3 years, or are you sort of duplicating each trade within that darwin in which case you’ll have many open and closed CFDs? If it’s one contract that means as long as you’re holding onto that darwin, your profit is still unrealised and since you didn’t close the CFD you won’t need to report the profit or loss until you close the contract. Which means you could hold onto it for 3 years and not pay the CGT until year 3? Or if actually you are entering many duplicate CFDs based on the darwin’s portfolio then you would have to declare your profit and losses every year even if just holding onto one darwin. So if anyone knows about this I’d love to know the answer to this. :blush:


Look at your tax report ‘split by trades’ here. As far as I remember it, your Darwin is splittend into all of its forex and CFD trades so you are investing in forex and CFDs from the view of the authorities. Every single trade of the Darwin is copied and listed in your tax report.
Darwin’s are not an own asset class yet.


Ah ok I see thanks. Yeah I was wondering if it would be something like holding onto a ETF CFD or something, because not having to pay tax and letting it grow would have been great!