{"id":8159,"date":"2020-10-23T16:36:43","date_gmt":"2020-10-23T15:36:43","guid":{"rendered":"https:\/\/taxfix.com\/en-uk\/?p=8159"},"modified":"2025-02-11T16:45:07","modified_gmt":"2025-02-11T16:45:07","slug":"can-forex-trading-uk-be-a-full-time-job","status":"publish","type":"post","link":"https:\/\/taxfix.com\/en-uk\/investor-capital-gains-tax-returns\/trading\/can-forex-trading-uk-be-a-full-time-job\/","title":{"rendered":"Can forex trading (UK) be a full-time job?"},"content":{"rendered":"\n<p>If you start forex trading (UK), you need to make sure that you\u2019re doing it at volumes that can support your livelihood. It\u2019s the same with any other pursuit that you take on freelance. You have to ensure that you have enough business (and income) to do it full-time.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What is forex trading?<\/h2>\n\n\n\n<p>Let\u2019s start from the beginning. Forex trading is basically foreign currency exchange. You bet on the movement on currencies to make a profit. And as so many currencies are very volatile when it comes to the movement in their value, the space is very popular for traders.&nbsp;<\/p>\n\n\n\n<p>The two popular methods of trading are:<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li>Derivative products\n<ul class=\"wp-block-list\">\n<li>Spread betting<\/li>\n\n\n\n<li>CFD trading<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li>Via a forex broker<\/li>\n<\/ol>\n\n\n\n<p>Read more about <a href=\"https:\/\/www.ig.com\/uk\/forex\/what-is-forex-and-how-does-it-work\" target=\"_blank\" rel=\"noreferrer noopener\">forex trading<\/a> here.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Why start forex trading (UK)?<\/h2>\n\n\n\n<p>Unlike your standard 9-5, the forex market is open 24\/7. This means that you can easily dabble in it during your spare time before you take it on full-time. Another advantage is that it\u2019s a very accessible pursuit. You can start forex trading from you phone, laptop &#8211; and all from your sofa.&nbsp;<\/p>\n\n\n\n<p>Here\u2019s a list of other features that make forex trading attractive to take on full-time:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Lots of resources online to learn how to trade forex<\/li>\n\n\n\n<li>High profits (although high risk)<\/li>\n\n\n\n<li>Low transaction costs<\/li>\n\n\n\n<li>Big selection of currency pairs to choose from<\/li>\n\n\n\n<li>It\u2019s decentralised &#8211; the market isn\u2019t owned by one central power<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Are there disadvantages?<\/h2>\n\n\n\n<p>There are disadvantages to going freelance, in any industry. The lack of stability is the major disadvantage and one that\u2019s even more pronounced when you\u2019re just starting out. When it comes to forex trading specifically, the risk can be significant.So it\u2019s not something that you should give up the day job for without ample research and preparation.&nbsp;<\/p>\n\n\n\n<p>Another risk in forex trading is that fraud is rife in the space. Not every broker will have your best interests at heart so it\u2019s very wise to tread carefully.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Tax implications of forex trading<\/h2>\n\n\n\n<p>Working as a full-time investor will mean that you\u2019re responsible for paying your own taxes. You\u2019ll have to do this via a tax return after the end of each <a href=\"https:\/\/taxfix.com\/en-uk\/what-is-the-tax-year\">tax year<\/a>. There are potentially three types of tax that you might owe<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">1. Income Tax<\/h3>\n\n\n\n<p>This is he tax that we all have to pay on our earnings when we earn more than the Personal Allowance.<\/p>\n\n\n<\/div> <!-- .c-body -->\n\n<div class=\"b-highlight-mini m-neutral m-align-left\">\n    <div class=\"b-block-body\">\n        <p><span style=\"font-weight: 400;\">The <\/span><b>income tax<\/b><span style=\"font-weight: 400;\"> rates in the 2025\/26 tax year \ud83d\udc47<\/span><\/p>\n<table>\n<tbody>\n<tr>\n<td><strong>Income<\/strong><\/td>\n<td><strong>Tax rate<\/strong><\/td>\n<td><strong>Tax band<\/strong><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Up to \u00a312,570<\/span><\/td>\n<td><span style=\"font-weight: 400;\">0%<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Personal allowance<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">\u00a312,571 to \u00a350,270<\/span><\/td>\n<td><span style=\"font-weight: 400;\">20%<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Basic rate<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">\u00a350,271 to \u00a3125,140<\/span><\/td>\n<td><span style=\"font-weight: 400;\">40%<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Higher rate<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">over \u00a3125,141<\/span><\/td>\n<td><span style=\"font-weight: 400;\">45%<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Additional rate<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n    <\/div>\n<\/div> <!-- .b-highlight-mini -->\n\n<div class=\"c-body\">\n\n\n\n\n\n<h3 class=\"wp-block-heading\">2. National Insurance<\/h3>\n\n\n\n<p>We pay national insurance  to be entitled to certain state provided benefits such as the Marriage Allowance or the state pension.<\/p>\n\n\n<\/div> <!-- .c-body -->\n\n<div class=\"b-highlight-mini m-neutral m-align-left\">\n    <div class=\"b-block-body\">\n        <p><b>National Insurance<\/b><span style=\"font-weight: 400;\"> rates in the 2025\/26 tax year \ud83d\udc47<\/span><\/p>\n<table>\n<tbody>\n<tr>\n<td><strong>NI class<\/strong><\/td>\n<td><strong>Who pays?<\/strong><\/td>\n<td><strong>How much?<\/strong><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Class 1<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Employees earning over \u00a312,570<\/span><\/td>\n<td><span style=\"font-weight: 400;\">8% on earnings between \u00a3242 and \u00a3967 per week<\/span><\/p>\n<p><span style=\"font-weight: 400;\">2% if you earn \u00a3967+ per week<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Class 1A\/1B<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Employers<\/span><\/td>\n<td><span style=\"font-weight: 400;\">15%<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Class 3<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Voluntary contributions<\/span><\/td>\n<td><span style=\"font-weight: 400;\">\u00a317.75 per week<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Class 4<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Self-employed earning over \u00a312,570<\/span><\/td>\n<td><span style=\"font-weight: 400;\">6% on profits between \u00a312,570-\u00a350,270<\/span><\/p>\n<p><span style=\"font-weight: 400;\">2% on profits over \u00a350,270<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n    <\/div>\n<\/div> <!-- .b-highlight-mini -->\n\n<div class=\"c-body\">\n\n\n\n\n\n<h3 class=\"wp-block-heading\">3. Capital Gains Tax<\/h3>\n\n\n\n<p>Owing CGT is dependent on how much profit you make from your investments. Anything you make over the CGT allowance will be subject to tax!<\/p>\n\n\n<\/div> <!-- .c-body -->\n\n<div class=\"b-highlight-mini m-neutral m-align-left\">\n    <div class=\"b-block-body\">\n        <p><b>Capital gains tax<\/b><span style=\"font-weight: 400;\"> rates in the 2025\/26 tax year. It\u2019s paid on profits over the \u00a33,000 CGT allowance \ud83d\udc47<\/span><\/p>\n<table>\n<tbody>\n<tr>\n<td><b>Type of asset<\/b><\/td>\n<td><b>Basic rate<\/b><\/td>\n<td><b>Higher rate<\/b><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Shares<\/span><\/td>\n<td><span style=\"font-weight: 400;\">10%<\/span><\/td>\n<td><span style=\"font-weight: 400;\">20%<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Residential property<\/span><\/td>\n<td><span style=\"font-weight: 400;\">18%<\/span><\/td>\n<td><span style=\"font-weight: 400;\">24%<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Bitcoin\/cryptocurrency<\/span><\/td>\n<td><span style=\"font-weight: 400;\">10%<\/span><\/td>\n<td><span style=\"font-weight: 400;\">20%<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Other<\/span><\/td>\n<td><span style=\"font-weight: 400;\">10%<\/span><\/td>\n<td><span style=\"font-weight: 400;\">20%<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n    <\/div>\n<\/div> <!-- .b-highlight-mini -->\n\n<div class=\"c-body\">\n\n\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>If you start forex trading (UK), you need to make sure that you\u2019re doing it at volumes that can support your livelihood. It\u2019s the same with any other pursuit that you take on freelance. You have to ensure that you have enough business (and income) to do it full-time. What is forex trading? Let\u2019s start [&hellip;]<\/p>\n","protected":false},"author":9,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[458,460],"tags":[70,414,418],"class_list":["post-8159","post","type-post","status-publish","format-standard","hentry","category-investor-capital-gains-tax-returns","category-trading","tag-capital-gains-tax","tag-employment-status","tag-invest"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.8 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Can forex trading (UK) be a full-time job? &#8211; Taxfix<\/title>\n<meta name=\"description\" content=\"If you&#039;ve just started forex trading (in United Kingdom), you probably want to know whether this can become a full-time job. 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