How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Sam Your Own Question

Sam
Sam, Accountant
Category: Tax
Satisfied Customers: 13657
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
16196420
Type Your Tax Question Here...
Sam is online now

Dear Sir or Madam, Fresh out of university I recently started

Customer Question

Dear Sir or Madam,
Fresh out of university I recently started as a self-employed day trader trading financial products (CFD's) and this will be my main source of income. I just wanted to ask how does the taxation in my situation work out in the UK? How do I notify the Tax Authority? Am I liable to hiring an accountant?
Thank you for Your help in advance.
Submitted: 2 years ago.
Category: Tax
Expert:  Sam replied 2 years ago.
Hi
Thanks for you question, I am Sam and I am one of the UK tax experts here on just Answer.
CFDs are usually treated as liable to income tax, when you trade full time, so you will be treated as self employed and liable to tax and National Insurance.
You should make sure that you register with HMRC for self assessment and I have added a link here for you to do this
https://online.hmrc.gov.uk/registration/options
Then after each 5th April you will be asked to complete a self assessment tax return where you will declare your profits and claim expenses in earning that income.
The net profit figure will then be subject to tax, with the first £10,000 tax free - then next £31865 at 20% and then between £31866 and £150,000 at 40% and anything over £150,000 at 45%
Pleas also note that any bet profits in excess of £100,000 also sees a reduction in the tax free allowances, with £1 of allowance taken for every £2 over the £1000,000 threshold. So if you have profits of more than £120,000 then you have no tax free allowances so all your profits are liable to tax.
There is also National Insurance, as a self employed individual you pay Class 2 National Insurance which amounts to £2.75 a week, paid either quarterly or monthly direct debit from your bank, if your profits will exceed £5885 a year.
There is also Class 4 National Insurance, which is calculated at the same time as the tax due.
Class 4 National Insurance allows the first £7956 to be tax free, and any remaining profit at 9% with profits between £7957 and £41450 - then any profits in excess of £41450 at 2%
The tax and any Class 4 National Insurance due then is payable the following January - so if you file a tax return after 05/04/2015 for the tax year 2014/2015, then the tax bill is due to be paid no late than 31st Jan 2016.
There is no need to hire the services of an accountant, however, many individuals find this makes their life easier, and of course the cost of an accountant is a business expense, so you can claim the cost of this as an expense against the profits made.
Let me know if you wish me to expand on any of the information provided
Thanks
Sam

What Customers are Saying:

 
 
 
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
< Previous | Next >
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP
  • I couldn't be more satisfied! This is the site I will always come to when I need a second opinion. Justin
  • Just let me say that this encounter has been entirely professional and most helpful. I liked that I could ask additional questions and get answered in a very short turn around. Esther
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
 
 
 

Meet The Experts:

 
 
 
  • Sam

    Sam

    Accountant

    Satisfied Customers:

    6894
    26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
< Last | Next >
  • http://ww2.justanswer.com/uploads/TA/Tax Expert/2013-8-21_231010_sam.64x64.jpg Sam's Avatar

    Sam

    Accountant

    Satisfied Customers:

    6894
    26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
  • http://ww2.justanswer.com/uploads/BI/bigduckontax/2013-8-12_222058_1.64x64.jpg bigduckontax's Avatar

    bigduckontax

    Accountant

    Satisfied Customers:

    1772
    FCCA FCMA CGMA ACIS
  • http://ww2.justanswer.com/uploads/TA/TaxRobin/2013-8-28_16186_femalebusinessprofessionalbinderhand11038485.64x64.jpg TaxRobin's Avatar

    TaxRobin

    Tax Consultant

    Satisfied Customers:

    464
    International tax
  • /img/opt/shirt.png taxadvisor.uk's Avatar

    taxadvisor.uk

    Chartered Certified Accountant

    Satisfied Customers:

    2596
    FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
  • http://ww2.justanswer.com/uploads/MS/MsAM/2012-6-9_16426_anna.64x64.jpeg Anna's Avatar

    Anna

    Teacher, writer, biologist

    Satisfied Customers:

    268
    Great research skills, variety of work experiences, teaching experience.
  • http://ww2.justanswer.com/uploads/PD/pdheslin/2012-6-6_232056_pambig.64x64.jpg pdheslin's Avatar

    pdheslin

    Consultant

    Satisfied Customers:

    51
    20+ years of internet site creation and search engine optimization. Dozens of search tools at my disposal.
 
 
 

Related Tax Questions