7 Best UK Spread Betting Brokers and Platforms for 2024

How to Choose a Spread Betting Broker?

When diving into spread betting, it’s crucial to choose the right broker. This decision could significantly shape your trading experience. While this article serves as a guide to point out the key factors you should consider when choosing your broker, you should also pay attention to the following points detailed below.

Is spread betting legal in the UK?

Yes, spread betting is legal in the UK. It is a form of derivative trading that allows you to speculate on the price movements of various financial markets such as forex, indices, commodities, shares, and more.

One of the key features of spread betting in the UK is that it is exempt from capital gains tax and stamp duty, as long as it is not your primary source of income. However, tax laws can change and may vary based on individual circumstances, so it’s always a good idea to seek professional advice if you’re unsure.

It’s also worth noting that spread betting is regulated by the Financial Conduct Authority (FCA) in the UK. This means that firms offering spread betting services must adhere to certain rules and regulations to protect consumers. These include ensuring that customers are treated fairly, that risks are clearly explained, and that firms have adequate financial resources.

However, spread betting is a high-risk activity, so it’s important to understand the risks involved and consider seeking independent advice before you start.

Check our list of Best FCA-regulated forex brokers.

Is spread betting tax-free in the UK?

Tax laws regarding spread betting differ from country to country and depend on individual circumstances. As these laws are subject to change, it’s important to regularly update your knowledge or seek professional advice.

For the majority of UK residents, spread bets are tax-free, typically exempting you from paying stamp duty and capital gains tax on your profits, as spread betting is classified as gambling under UK law, rather than as an investment activity.

However, if spread betting is your primary source of income, different tax rules may apply, potentially categorizing you as a professional gambler liable for income tax.

Additionally, while you might not have to pay tax on spread betting profits, losses from spread betting cannot be used to offset any gains for tax purposes. Given the complexity and variability of tax laws, consulting with a tax professional or advisor is advisable to understand how these laws apply to your specific situation.

Find our guide to Best forex broker in the UK.

How to choose a safe forex broker for Spread Betting?

The foremost consideration when selecting a spread betting broker should be the safety of your funds. It’s crucial to choose a broker that is under the watchful eye of trusted financial regulators like the Financial Conduct Authority (FCA) in the UK.

As spread betting is a product only available to UK residents, only UK-regulated brokers can offer this product. This means they will either be regulated by the UK FCA or have temporary status from a European regulator such as the Cyprus Securities and Exchange Commission (CySEC) to offer services in the UK.

However, there are multiple benefits to choosing a full FCA-regulated broker. First of all, it is a regulatory requirement to segregate client funds from company funds. This ensures the broker is not using client capital to fund their operations.

Secondly, it is a regulatory requirement to offer negative balance protection to retail clients. This is a risk management measure that ensures your account does not go below zero in the event of an adverse move in the market.

Lastly, FCA-regulated firms are part of the FSCS Compensation Scheme. This means your capital is protected up to £85,000 in the event the broker becomes insolvent.

Read more about Best regulated forex brokers.

What fees should to expect when you spread bet?

A spread betting broker may charge several types of fees. It is important to understand these fees to ensure profitability.

Trading fees

In spread betting, the trading fee is the spread, which is the difference between the buying and selling price of a market. Brokers with narrower spreads can help you save money and increase your earnings over time.

With spread betting, there are no commissions to buy and sell, as all the costs are inside of the spread.

Non-trading fees

These fees could include charges for deposit and withdrawal, account inactivity, and account maintenance. Although these might seem small, they can add up over time and dip into your profits. Always review the broker’s fee structure thoroughly before committing.

With spread betting, there are no currency conversion fees on any of the markets you trade as they are priced in points using GBP. Take a look at our guide for the best forex brokers with lowest spreads.

What is the best type of Spread Betting account?

Brokers provide a range of spread betting account options, and the ideal one for you depends on your trading objectives, your appetite for risk, and your level of experience in trading.

The most obvious choice is between a retail and professional spread betting account. However, to access a professional spread betting account, you will need to pass an FCA suitability test to show you have enough funds and experience to be regarded as a professional.

While professionally categorized traders may get access to higher leverage, they also lose some protections such as negative balance protection.

Explore Best forex micro accounts and Best forex big accounts.

How much leverage to use for spread betting?

Leverage can significantly increase your trading power, enabling you to take larger positions than your account balance. Leverage is like a two-sided coin, as it can also amplify potential losses. The ideal level of leverage should align with your risk tolerance and trading approach.

Though increased leverage might lead to higher possible gains, it can also result in a higher level of loss. It is a regulatory requirement from the FCA to offer retail traders a maximum of 30:1 leverage on forex pairs. This means you can open a position 30 times bigger than the capital you put up.

Explore Best forex brokers with high leverage.

What is the best trading platform for spread betting?

Choosing the best trading platform for spread betting depends on a combination of your individual trading needs, style, and level of experience. However, certain platforms are acclaimed for their superior features, excellent user interfaces, and reliable customer service.

Most common trading platforms:

• MetaTrader 4: This platform is known for its high level of customization and technical analysis tools. Discover Best MT4 brokers.
• MetaTrader 5: This is an updated version of MT4, with more functionality such as more timeframes and indicators. Explore Best MT5 brokers.
• cTrader: This platform is well-known for its advanced charting tools and algorithmic trading capabilities. Find Best cTrader brokers.
• In-House Proprietary Software: Certain brokers may have their own proprietary trading software, which comes with the best features such as market sentiment indicators, inbuilt news, and research.

You should test each of the spread betting platforms offered by a broker using a demo account to see which one is most suitable for you.

Check our guides on the Best forex trading platforms.

What to avoid when choosing a forex broker for Spread Betting?

Steer clear of brokers that aren’t regulated by a reputable authority, such as the UK FCA. Also, avoid brokers that promise unrealistic high profits or bonuses. Such offers are often used by dishonest brokers to attract unsuspecting traders but are banned by tier 1 regulators such as the FCA.

How to avoid forex and spread betting scams?

To effectively avoid scams in Forex and spread betting, focus on these five critical points:

• Regulatory Compliance: Always verify that the broker or firm is registered with a reputable regulatory authority like the FCA, CFTC, or ASIC. Regulatory compliance is a primary indicator of a broker’s legitimacy.
• Research Reputation: Investigate the broker’s history for user reviews, industry recognition, and any past regulatory issues. A broker with a positive track record and transparency is less likely to be involved in scams.
• Beware of Promises of High Returns: Be extremely cautious of any entity promising guaranteed high returns or low risks. Remember, Forex and spread betting are high-risk activities, and no returns can be assured.
• Check Communication Channels: Legitimate brokers have professional and responsive customer service. Difficulty in communication or evasive responses is a red flag.
• Withdrawal Ease: Ensure that the broker provides straightforward procedures for withdrawing funds. Difficulty in withdrawing your money is a common trait of scam operations.

Our Methodology

While pioneering the broker rating review industry many years ago, FXEmpire’s review process has been updated over the years and now includes 250 data points across nine different categories.

Each broker evaluation includes opening a live trading account, experiencing the live trading fees first-hand, testing the quality of live customer support agents, and more. In fact, each broker is evaluated by the following nine core categories:

• Trust
• Fees
• Platforms and tools
• Tradable instruments
• Customer service
• Deposit and withdrawals
• Account types
• Research
• Education

For this guide, we prioritized brokers licensed by the UK Financial Conduct Authority (FCA), ensuring regulatory compliance and reliability. Our analysis also focused on brokers offering diverse asset classes for spread betting, adhering to FCA-regulated leverage limits (30:1 for retail, higher for professionals).

We assessed the user-friendliness and efficiency of their platforms, including the availability of various trading tools. Additionally, we scrutinized the competitiveness of spreads across forex pairs and other instruments, coupled with the minimum deposit requirements, to ascertain accessibility and cost-effectiveness for traders. This holistic methodology enabled us to pinpoint brokers that excel in regulatory standards, trading diversity, platform usability, and financial feasibility.

Meet Our Writers

The team of forex and CFD writers and editors at FXEmpire is composed of trading industry professionals and seasoned financial journalists. Our writers have been published on leading financial websites such as Investopedia and Forbes. In addition, they all have extensive trading experience.

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