Best CFD Service Provider for UK
Trading forex (currencies) in the United Kingdom (UK) is popular among residents. Before any fx broker can accept UK forex and CFD traders as clients, they must become authorised by the Financial Conduct Authority (FCA), which is the financial regulatory body in the UK. The FCA’s website is FCA.org.uk. We recommend UK residents also follow the FCA on twitter, @TheFCA.
The FCA was formed out of the Financial Services Act of 2012, effectively replacing its predecessor, the Financial Services Authority (FSA). For a historical breakdown, here’s a link to Financial Conduct Authority webpage on Wikipedia.
To find the Best forex CFD providers in the UK, we created a list of all FCA authorised brokers, then ranked brokers by their Overall ranking.
Here is our list of the best forex CFD providers in the United Kingdom:
General Info
- Min Deposit: $100
- Max Leverage: 30:1
- Inactivity fee: Yes
- Platforms: Plus500 app, Webtrader
Average Spread
- EURUSD: 1.1
- USDJPY: 1.9
- GBPUSD: 1.5
- GOLD: 0.3
82% of retail CFD accounts lose money
General Info
- Min Deposit: $10
- Max Leverage: 30:1
- Inactivity fee : Yes
- Platforms: Mobile app, Webtrader, TVC, MT4, MT5
Average Spread
- EURUSD: 1.5
- USDJPY: 1.7
- GBPUSD: 1.6
- GOLD: 0.4
82% of retail CFD accounts lose money
General Info
- Min Deposit: $100
- Max Leverage: 30:1
- Inactivity fee: Yes
- Platforms: Mobile app, Webtrader, MT4, MT5, cTrader
Average Spread
- EURUSD: 1.3
- USDJPY: 1.7
- GBPUSD: 2.0
- GOLD: 0.3
82% of retail CFD accounts lose money
General Info
- Min Deposit: $100
- Max Leverage: 30:1
- Inactivity fee: Yes
- Platforms: Mobile app, Webtrader
Average Spread
- EURUSD: 1.0
- USDJPY: 1.0
- GBPUSD: 1.5
- GOLD: 0.45
71-89% of retail CFD accounts lose money
General Info
- Min Deposit: $200
- Max Leverage: 30:1
- Inactivity fee : No
- Platforms: Mobile app, Webtrader, TVC, MT4, MT5, cTrader
Average Spread
- EURUSD: 0.1 – $7 Commission/Lot
- USDJPY: 0.3
- GBPUSD: 0.4
- GOLD: 0.19
71-89% of retail CFD accounts lose money
General Info
- Min Deposit: $450
- Max Leverage: 30:1
- Inactivity fee: Yes
- Platforms: Mobile app, Webtrader, MT4
Average Spread
- EURUSD: 0.7
- USDJPY: 1.1
- GBPUSD: 1.0
- GOLD: 0.4
71-89% of retail CFD accounts lose money
How can I trade forex in the U.K.?
First, select a trustworthy U.K. forex broker regulated by the Financial Conduct Authority (FCA). Next, open and fund your new brokerage account, and fill out the order ticket to place a trade. Most online brokers offer demo accounts so you can practice with virtual currency and become familiar with how the trading platform works before funding your account with real money.
More details: Choosing an FCA-regulated broker will ensure that you are entitled to any applicable legal protections. To be FCA-regulated in the U.K., brokers must comply with a strict list of requirements.
Why is the Financial Conduct Authority (FCA) important for forex traders in the UK?
The Financial Conduct Authority (FCA) regulates U.K.-based brokers that legally offer forex and other derivatives to retail and professional traders. According to the regulator’s official website, the FCA regulates the conduct of 50,000 firms across the U.K. and prudentially supervises 48,000 firms.
The FCA aims to enforce compliance and ensure that firms are following the rules and regulations set forth in the FCA handbook. In extraordinary circumstances, the FCA can take emergency action and prevent brokers from opening new trades for customers, or suspend (or even revoke) a broker’s license if there have been substantial compliance failures and/or violations.
Like any financial markets regulator, the FCA’s role is to protect investors (including forex traders) and to uphold market integrity within the U.K. forex trading industry. The FCA is a strict regulator with stringent rules and regulations, which has contributed to our ranking of the FCA as a Tier-1 regulatory agency.
Is forex trading legal in the UK?
Yes, forex trading is legal in the U.K. and regulated by the Financial Conduct Authority (FCA). The FCA requires that brokers obtain proper licensing and authorization in order to legally offer forex trading to clients.
FCA-regulated brokers: Per the FCA’s handbook, forex is a regulated activity. As such, brokers that handle customer deposits and arrange and/or deal in investments – whether acting as the principal or agent – must hold proper authorization from the FCA.
Deposit insurance: FCA-regulated forex brokers also provide certain compensation rights to retail customers in the extraordinary event of insolvency or bankruptcy. The U.K.’s Financial Services Compensation Scheme (FSCS) provides up to 85,000 GBP of protection per eligible person.
Professional clients: It’s important to note that U.K. clients that have been designated as professional traders do not receive any such protections from the FSCS.
Avoiding potential scams: Since forex trading requires that brokers obtain proper licenses with the FCA, you must be certain that your broker is FCA-regulated to avoid falling victim to a potential scam.
Do you pay tax on forex trading in the U.K.?
Yes, U.K. residents must report their worldwide income in the U.K. – including any gains from forex trading. That said, there is an exception for tax obligations if you are trading forex via spread betting. Gains from forex spread betting are tax-free for U.K. residents, while gains from regular forex trading are not exempt, and are taxed accordingly. Additionally, forex trades do not incur the U.K.’s stamp duty tax obligation, which applies to any online or offline share trading.
It’s also worth mentioning that there is a small tax exemption of up to £1,000 provided by the U.K. tax authority HM Revenue and Customs (HRMC) available to certain individuals. If your capital gains from trading over a calendar year do not exceed £1,000, you may not need to pay taxes on that income (though you may have to register for a self-assessment with the HRMC).
Note: Claiming this exemption may prevent you from claiming other exemptions of greater value (such as capital allowances). It’s always prudent to consult a tax advisor; each person has unique financial circumstances and applicable tax elections may vary.