Spreadbetters fight back over new tax claims
29 November 2013 1:20am
SPREAD betting firms fought back yesterday after the Treasury said it would discuss the tax exemption of spread betting following concerns raised in the House of Lords.
Labour peer Lord Eatwell accused spread betting of being “a really extraordinary form of tax avoidance within the financial services industry”.
As a result, Lord Newby, the Treasury spokesman in the House of Lords, said he agreed ministers “ought to look” at the apparent “loophole” that allows spread betters to avoid income tax, capital gains tax and stamp duty on transactions.
However, industry sources pointed out that while spread betters did not pay tax on profits, losses were not tax deductible.
They also noted for many traders, the tax they saved on profits was within their normal capital gains allowance.
And they pointed out that spread betting firms themselves paid full tax. “As most of our clients’ individual profits would not be liable to capital gains tax it could be argued that the Treasury is better off with spread betting firms paying betting duty,” said a source at one firm.
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