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If you start forex trading (UK), you need to make sure that you’re doing it at volumes that can support your livelihood. It’s 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.
Let’s 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.
The two popular methods of trading are:
Read more about forex trading here.
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’s a very accessible pursuit. You can start forex trading from you phone, laptop – and all from your sofa.
Here’s a list of other features that make forex trading attractive to take on full-time:
There are disadvantages to going freelance, in any industry. The lack of stability is the major disadvantage and one that’s even more pronounced when you’re just starting out. When it comes to forex trading specifically, the risk can be significant.So it’s not something that you should give up the day job for without ample research and preparation.
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’s very wise to tread carefully.
Working as a full-time investor will mean that you’re responsible for paying your own taxes. You’ll have to do this via a tax return after the end of each tax year. There are potentially three types of tax that you might owe:
Take a look at our guide to learn more about Capital Gains Tax. Or if you’d like to calculate the tax you’d owe from your income, use our self-employed calculator below.
When you’re self-employed, you have to pay your income tax and national insurance contributions yourself in your annual Self Assessment. Our calculator helps you quickly assess how much you owe.
However you may be eligible for a tax refund when:
In your case when you earn £50,000:
You pay no income tax on first £12,570 that you make
You pay £7,286 at basic income tax rate (20%) on the next £36,430
No contributions on the first £9,568 that you make
You pay £3,549 in contributions (at 9%) on the next £39,432 that you make
You pay £159 in NI Class 2 contributions
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