Can I Claim Spread Betting Losses Back on My Tax Return?

It would be amazing if this were the case but its is absolutely not the case. This would make spread betting insanely appealing because you would essentially be betting with the money you should pay the tax man.

Why The Government Doesn't Tax Spread Betting

It is often asked why the government does not tax spread betting (it does charge income tax for professionals though) and the answer is that it would not make the government any money at all. The reason for this is that if the government taxed your winnings it would have to allow you to deduct your losses when calculating the amount of capital gains due. The reality of spread betting is that a lot of people lose a lot of money. The government does not want to be in the business of deducting the losses from your dangerous trading habits from the amount you pay in tax.

Although the government could decide to tax just the winnings and not allow the deductions (which would be pretty unfair). However, you have to remember that the government is taxing the spread betting companies profits at the corporate tax rate. So if the government announced that it was going to take between 18 and 28% of the money you make then spread betting would be far less appealing and the profits of the spread betting companies would be reduced (punters would run out of money faster and new customers would be much harder to attract - especially rich ones that pay the higher capital gains tax rate).

Make sure you take this point seriously - you are the one and only person who is on the hook for your losses.