FTMO TAX - Limited Company [what UK tax do you pay on FTMO with a Ltd after passing FTMO challenge?]
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- Опубліковано 27 лип 2024
- Second tax video on FTMO tax as requested. Looking this time at tax through a limited company approach to FTMO earnings once you pass the FTMO challenge.
Disclaimer: I am not a finance professional and my videos are for entertainment purposes only. You should always seek approved financial advice before making any decisions that effect your finances.
Video Breakdown:
00:00 - Intro
00:38 - Situations covered
01:47 - What to expect
02:20 - Things to consider
02:57 - Corporation Tax
03:18 - VAT Registration
03:36 - FTMO VAT/Prague VAT
04:32 - Examples criteria
04:47 - Self Assessment Registration
04:59 - Example 1 - working a full time job along side opening an LTD for FTMO
07:34 - Take home earnings - example 1
08:12 - Example 2 - FMTO as sole income
12:00 - Take home earnings - example 2
12:52 - Summary and comparisons of examples
13:42 - Wrap up
13:56 - What's next? Upcoming requested videos
#ftmotax #tax #forextax #ftmochallenge #forextrading #forextrader #ltdcompany #limitedcompany
![TAX ON FOREX - Limited Company [Do you pay tax on forex trading? Forex Trading Tax, UK Forex Tax]](http://i.ytimg.com/vi/6QOOwhCA8_k/mqdefault.jpg)
![TAX ON FTMO [DO YOU PAY TAX ON FTMO? WHAT UK TAX DO YOU PAY ON FTMO ONCE PASSING THE FTMO CHALLENGE]](http://i.ytimg.com/vi/D3BM_vy3rWs/mqdefault.jpg)
I normally speed up videos, but looks like you have already done it for me . :D
😂😂 yeah I do the same, maybe that's why I speak too fast now! Living my life on 2x speed 😂
@@MatttoMillion
so i have a question. what if the company has more than 1 directors/owners ... like you can have 2 spouses or parents involved in the company and pay them the dividend as well. won't it help greatly keeping the tax rate down ?
Yeah depends on their situation of course (as to what tax they'd be eligible for) but yeah, you could set up that way. The only thing to bear in mind would be that it would be paid to them and therefore they'd be tax liable and it'd be their money. So if you were planning on earning the money and just paying/supporting your family anyway and they're either not working or on a lowish salary, then this would be a considerable option.
The ideal would be having a member of your family who isn't working be able to be employed by your LTD as then a salary can be paid and set up. And with two + employees you get slightly more NI relief too.
LOL!!!!! That's what I thought and I had a hard time keeping up - he talks so fast!
Lol....he is awesome!
Thank you Matt, appreciate the time you took to make this video. It was very helpful!
Really appreciate the support - thank you 🙏 🙏
Exactly what I wanted to see. Cheers man, subscribed!
Ah glad to here it man - thanks for the support 🙏
Such useful video thank you, this is the first vid ive come across which has actually given advice instead of being vague! Thank you!
Thanks man really appreciate it 🙏 that's the goal! Let me know if there's anything you'd like to see next!
Thanks for taking the time to do this mate
🙏 Glad you enjoyed it!
Quality stuff there mate. Thank you. Probably design and trademark a spreadsheet that does these calculations. Well done Matt.
Cheers Elaishar - glad you got some value from it 🙏🙏
one of the most informative channels, if not the best
Thank you - appreciate this 🙏
Thank you so much for this! super valuable mate !!! respect
Thanks mate glad you got some value from it 🙏🙏
We appreciate your hard work and efforts going into these fantastic videos, your the only channel that addresses these issues especially in the UK. Also i would love to see a video on how you'd actually go about paying yourself as an FTMO trader through your own LTD company. That'll be great cheers Pal 👍🏽
Thank you man - really appreciate it 🙏🙏 And sure thing! Will add that to the list of videos to create 👍🏻
Thanks so much Matt. That must have taken you an awfully long time to workout and research all those figures, its much appreciated. At first I feel more inclined to just declare this as personal income... but if my wife were to give up her job and she was also a shareholder with the limited company it could be a lot more tax efficient. As you said, I will certainly consult with a good accountant.
Thanks a lot - glad you got something from it 🙏
Great video, Matt. Thank you.
Thanks Ola, glad you like it 🙏🙏
Great video, well explained - thank you
Thanks Rhys - glad you enjoyed it 👊🏻
This has been helpful!! Thanks Matt!
Thanks Sikudhani - glad to hear it! 🙏
Thanks I was waiting on this one
Thank you - Glad you've found some value from it!
Yes pls make a video on how to pay myself :D Awesome job btw.
Thank you - will do 🙏
Finally a no-waffle explanation. Many thanks!
Glad you got something from it 👊🏻
you just earned your self a new subscriber :P
🙏🙏
Good video. It's also worth calling out, that as a company director you are taxed 'on account'. This means HMRC estimate your tax for the following year and you have to pay 50% of that liability in advance in January and the remainder in July. This can be a bit of a shock if you're not ready for it as HMRC will come knocking whether you have had a profitable year or not. Whereas for an individual all your tax is calculated after you submit your annual tax return.
Well said!
Baffled. Need to watch this over and over again to fully get it
Yeah, it's quite the headache - easiest route is always to head to an accountant that does it day in day out! Well worth the cash so you don't need to think about it all
@@MatttoMillion thanks for the advice and appriciate the work getting this out there for us. Much love
woah so inciteful, class video!!
Thanks man - glad you enjoyed it 🙏
Brilliant Video!
Thanks Emma - glad you got something from it!
just what I needed to hear as I was worried about the tax man knocking the door
Glad you got something from it!
such a good video! can u do a more complex and detailed one too as you mentioned in the video. thanks!
Thanks Korolos - glad you got value from it! 🙏 and of course, will add on the list of upcoming vids 👍🏻
Brilliant video thank you
Glad you got something from it 👊🏻
Great video mate
Cheers mate - really appreciate it 🙏🙏
Great video, would be interesting to see a breakdown of tax liability when trading FTMO full time via a limited company making over 6 figures annually and using the profits taken as dividends (only up to £50,000 - average annual personal expenses) in a personal trading account
Glad you liked it 🙏 good idea, will add that one to the list!
@@MatttoMillion If i'm expected to earn over £200k in a year from FTMO without a job would the benefit of having a limited company be much greater? (assuming worst case scenario).
Hey Matt, loved your FTMO videos. Have you done videos on TAX on crypto earnings?
Hey Faizan, thanks a lot! No I haven't done anything around crypto taxes myself but something that will likely surface later this year 🙏
this needs an excel file on the screen. very good info
I keep coming back watching this guy rapp. 😁
Edit: Subbed&Like.
😂😬🙏
What I did, was to keep trading as an individual but I massively increased my pension contributions in my workplace pension, right down to the point that I wasn’t paying any tax on my work salary. This kept the amount I paid in tax much lower, but at the same time helped me to grow my pension by a large amount in a short time period. I didn’t want to go through the whole setting up a company thing.
So you’re working just to not be able to spend your money till you’re old?
Matt is the best
Really nice information. Would love to see a 1k to 1mill update and would love to see it compared to your 8% increase per week video.
Thanks Niall 🙏 yeah of course, good shout! I'll aim to put together an end of year review type thing 👍🏻
@@MatttoMillion no problem, I can't imagine how busy you must be with a normal job, ftmo account, your own personal account and try to make UA-cam videos.
Haha, yeah it's pretty intense! Surprised me how long it takes to put together UA-cam videos. But let's see where the next year takes it!
@@MatttoMillion in my opinion you have one of the best channels I have come across I joined a few months ago thought this will be a nice journey to follow. There seems to be so much BS surrounding trading and Forex with people just trying to plug monthly training or joining VIP memberships signals. Keep it up 👌💪👍.
Ah cheers man - means a lot. Yeah that was really the purpose of the channel, to try and give some value that was a bit more than click baits and just copies of one another. I'm glad you're enjoying the channel and getting something from it 🙏
Thanks Matt. I need a lie down....
🤣🤣
Hi, very interesting video which I found by googling ftmo vat Uk. I’ve been looking for info on if your company is vat registered. I had 2 questions, 1 which is answered in your video which was would I charge ftmo vat. From your video the answer to that is no. This leaves the 2nd question. Would I be liable to pay vat on my turnover from ftmo if I’m not charging vat to ftmo?
Please advise if possible, thanks
It was really informative to watch both videos! Do you have a rough idea on how much it costs to set up a limited company? and the running costs of accountants etc? Because if you pay lets say more than 2000 pounds a year, then 1-2% profit "gain" on 70.000 are less than what you pay for to set it up and run it
Yeah it's usually around 2-3k per year if you get somebody to process everything for you (Corp tax, VAT, personal and all the companies house stuff)
Ltd co setup is better for profitable traders. You can benefit from tax as mentioned in video. Also you donot have to draw out all profit on same year so not all income will be taxed on same year. Your spouse can be on payroll if she helps with some admin work. You can plan better which is not possible as sole trader. But key is you have to be consistent profitable trader.
Yep - with the latest tax adjustments it's become less favourable to have an ltd just for you as an individual trader who wants to withdraw majority profits but as you say, if you want people of payroll, that situation can be of real benefit
I had to check if my playback speed is at normal or 1.25x :D
Dude put 20 mins of intofrmation into 14 minutes.
🤣🤣 I try my best!
Excellent video, thank you. Does this apply to US based prop firms too?
Yes, but with a LLC you can deduct a lot of expenses thereby lowering the tax. Depends on the country of course. There is no income or capital tax in Florida for example.
Yeah I'm not too sure about much outside the UK but yep expenses anywhere can play a big role!
Ahhh Florida. That will be amazing:D
Thanks Matt great informative video. I have a similar question I wanted to ask regarding offshore company formations in a 0% tax jurisdiction. In theory, set up an offshore company, then open an offshore bank account. How could I then pay myself?
Thanks Nick 🙏 that's beyond my personal experience unfortunately. The key things I'd be wary of is that you may end up owing personal tax in the chosen country + the UK. And though corporation tax may be zero in the given country, that's not to say that there aren't certain employer contributions made to the local government and also personal taxation upon withdrawal. Usually you would need some form of residency in a second country too and though there is ways around it, it can get a bit choppy on a UK return, especially if it's investigated and deemed evasion rather than avoidance.
But as I say, it's not my area! So I'd have a call with a tax advisor on that one!
Thanks for the vid Matt! What dividend tax rate would you pay if your other source of income is on an NT tax code? (Due to seafarers tax deduction)
Hey matt, thanks for the info, massive help. if i wanted to put all limited company profits into a account to trade through the limited company would i have to pay any tax on that? so to be clear i wouldn't declare them as profits and reinvest.
I have the exact same question, don’t suppose you have an answer to this yet 😂
Hi Matt, very helpful vids. Thanks.
Do we need a licence to trade for Ftmo, as we are providing a service related to financial industry?
If we set up a co, what should we put in the section that talks about the nature of business of the company .
Would be great if you can share your thoughts on this.
Thanks a lot - glad you're enjoying them 🙏 if you're referring to SIC codes, this would normally sit within catagory K and then you can select multiple SIC code variants that cover what angles you are/could be covering within your Ltd. (this varies a fair bit depending on people's trading activity.)
Ftmo is good as it allows access to greater amounts of money. Maybe once you earn a large amount of capital from it, could go off and grow it on other broker platforms and not pay tax at all as no longer using 3rd party's capital
Awesome video and thanks, it has cleared one or two things up.
Got one question...
If your trading your already taxed money in forex are you profits still taxable?
Thanks
Thanks J 🙏
Yeah, your profits are deemed on a 12 month period in an LTD. So once you pay tax on those you can do what you like with them but any profit made off of them are still taxable as it's seen as growth from your capital. (But of course you only then pay tax on the profit made from them)
@@MatttoMillion awesome thanks for your reply Matt..I do need to search for UK accountant companies specialising in Trading, if you can in a future video would be great if you could expand on this.
what about offshore companys or company outside the coutrz we live in , how to make tax more less , can you do that video
Thanks Matt for the excellent insight! Is it possible to trade a personal account under a limited company? i.e. using my existing retail account and treat the P&L under the limited company for accounting purpose ?
I make huge profits on my investment since I started trading with Anna Lawerence , her trading strategies are top notch coupled with the little commission she charges on her trade.
You can reach her on tele gram
Her user name is investwithAnnaLawerence
Under what kind of activity should we register our company? Independent Consulting?
great vid tho
Thank you mate
How would it work if you a British citizen but set up an LTD in another country (If that's even possible) where their countries tax is lower, i.e malta ect etc
Not looked into that and that'd be fairly complex as you'd need to abide by country laws where the LTD is listed and then the UK residential taxation side for receipt of personal monies. Paying dividends/salaries across countries comes into immigration and international tax laws so you'd really have to go to a specialist to find that out.
Can you start FTMO as a Personal account and then convert to a LtdCo account? Thanks, great vid!
Hi there since your from uk any tips.on uk business account struggling to find one for trading purposes as no one wants to take on this business as its deemed high risk.just look through banking sites any tips on opening one
This is really helpful. How do you navigate the issue of banks not allowing opening a business bank account relating to financial trading industry?
Heard this a lot lately and banks in general have put huge stops on opening any new business accounts. You aren't obligated to have a business account if you're a business, it just makes things easier. The easiest way around it for now, is to open a separate current/checking account and run all business affairs through that. Keeps the accounts clean that way and easier for your accountants.
Metro Bank. Problem solved
Any good accountants in the UK, with experience of trading, FTMO etc, that you can recommend? Very informative videos and appreciate your insights into this complex area of trading
Thank you for the support man, really appreciate it 🙏 as for accountants I wouldn't really recommend any as I do a lot of the account prep stuff myself and just get more of a once over on it all. I know that Accountantsunlocked have experience specifically dealing with traders/fx traders so may be worth having a consultation with them. But don't quote me on it as I say!
unsure on what sic code to use for trading with a prop firm ?
Would creating a shell company be of any benefit? Like cayman Islands, dubai etc for further deductions.?
Beyond my areas of knowledge unfortunately!
Do I need to pay taxes if I am Irish and live in Ireland I’m not sure about this any help would be appreciated. “Spread betting in Ireland is tax free but I’m not sure about ftmo... thanks in advance 🙌🏻
Hey Shane, I'm not familiar with Irish tax law unfortunately as I know there are some fundamental differences so couldn't comment!
do you have to pay tax on your personal account if you haven't withdrawn any profits? thanks for your video theyre so useful
Thanks man - really appreciate it 🙏it depends on your tax status/determination of your profession and also which instruments you're using. But in short, as an individual you pay tax on all your profits within that yearly period whether in a broker account or your bank account.
Maybe do one for how much tax you need to pay as you buy and sell through the yr without any with drawl and not have your trades in any form of isa etc .
Noted - will do a video on a few different options in the future 🙏
When you claim expenses, how are these taxed and subsidised. Say I was to buy a monitor, would they write off the VAT paid on it or would they subsidise it a different way? Cheers
Corporation tax and VAT are two separate returns. So it would depend if you're VAT registered. But if you're charging VAT, the net of VAT price would be expended from your corporation tax/profits and then the amount of VAT would he deducted from your VAT return level
Hello Matt, Do you know which SIC code to use when setting up a LTD company as a prop trader with firms like FTMO, My Forex Funds, etc?
Hi, Did you get an answer for this?
i understood some of those words
You did better than most!
Can you do a video on what would count as a tax right off
Thank you for this mate. When setting up a limited company for FTMO, which category would be best to put the business under? Where there’s the drop down menu with the different types of businesses?
I put mine under 66300 - Fund management activities
@@daniellake2377 Thank you
What SIC code did you use for your company registration?
You haven’t mentioned NI contribution in the example of only FTMO earnings through a limited company. Could you please explain that? Thank you 🙏
Hey David, yep that's more to do with the salary chosen as it falls under the NI thresholds for employee and employer and dividends are NI exempt currently
very nice video man, but couldn't we write our earnings to our anonymous company as a result wright our expenses there and be tax free?
Thanks Giannis 🙏
I mean, I couldn't really comment on that! It's beyond my experience. But I guess even if you expensed to a secondary company, that company would still owe tax and you'd still need to pay yourself at some point. Even if it was offshore, you usually need some form or residency and even then, if you're in the UK for the required amount of time each year you'd still owe UK tax. And if you were audited, it becomes a very fine line between tax evasion and tax avoidance.
But as I say, I don't really have any knowledge in that area - so don't listen to me 😂
The next problem is finding an accountant who understands and can do all this. I'm contacting accountants currently and I'm being told they don't understand it so they can't help me:(
Yeah it's really tricky finding one that understands the complexities of it all and also one you trust. The FTMO situation is relatively straight forward but when mixing it with a personal account it can get challenging from a tax and status determination standpoint for sure.
Can you write off failed prop firm challenges as expenses?
How about setting up a ltd company offshore in say, Gibraltar, for lower tax, and am I right in thinking they don't tax you on dividends? Would the hassle be worth it for someone living in the Uk
Or would you still have to pay tax on the dividends because it's coming to a source the UK?
Out of curiosity, other than building up a cash surplus in the company, why could you not just keep the money within the company and do your day-to-day spending on a company card, rather than paying all that dividend tax to spend on your personal card?
Because everything that you would buy on your company card would need to be a direct business cost that is 100%/solely for the company. So for most people, once the novelty of buying equipment, premises and subscriptions etc. wears off, there isn't a great deal of things that you could expense that wouldn't be overturned at an audit/tribunal and questioned as a personal cost or not 'wholly' for business use. If that happens, you'll be slammed with the investigation fees + a healthy fine + whatever is owed back on top. But to be honest, I've seen people do all sorts!
best concentrate and make money. if we make money we can pay tax 10% or 20% it does not matter.
Yep, tax is a privilege as they say. Though it's nearer 40% - 50% on high incomes. Still, it's a nice problem to have I guess!
Tax is a company's biggest expense, you'd be foolish to just be happy to pay 40% of your profits away to the Government, especially seeing how the Government wastes it. Why do you think large corps invest so much money in accountants?
Do you have to wait each year to take money out?
If after every month you move all from profits out of the company to a personal trading account, so essentially the company has zero profit at the end of each tax year, does that mean you pay no tax because your company is registering zero profit? Is this a possible route because I plan on having having ftmo as my only income but still put all profits back into a different trading account.
Did you ever figure this out?
@@jonny1293 yeah sadly u do still pay tax on it, but I’ve personally moved away from funded accounts anyway and not sure how long u have traded for but I can only recommend doing the same. Legislative position of prop firms being outside of some financial policy I see it as the safest option. If ur earlier in ur trading career would be more than happy to help u out if you would like. Good luck none the less.
@@rossharrison17 thanks, only been trading since January so this was more of research for long term as I I’m still learning.
@@jonny1293 if you would like a helping hand, would love to help u out, I have taught in the past and have institutional level experience. I understand how difficult it can be earlier on in the journey so would love to help.
want more trading profit tax-related video.
Noted - will be doing some new ones on a couple of income/tax topics soon
Good thing i live in the Netherlands no taxes on trading🤞
Nice! The netherlands is great! Jealous of the tax situ 😉
But if you are with FTMO you are not strictly trading. Your trades on a funded account are in fact on just a demo account. In the background FTMO copy your trades in a real account. You are effectively advising FTMO as a freelancer. So tax in the Netherlands would indeed be payable like any freelancer.
Thats a big chunk to take off your profits assuming that you are profitable which most traders fail miserably
Yeah it's a fair chunk - more than most people probably consider. But then it all depends on how people manage their accounts.
@@MatttoMillion im applying for the 10k challenge fingers crossed 🤞
If you were to earn over £150,000 from ftmo payouts without another source of income would it be better to set up a limited company?
There's not a huge amount in it but the general consensus would be yes. Just due to it being cleaner should you want to take on related ventures and also the fact that you would only be paying corporation tax in the first instance and so therefore should you want to be slightly more tax efficient on paying yourself each year, you could hold money in the company instead of paying it all out.
So basically, shell companies to avoid being taxed to holy hell
🤣
I had to slow it down at 0.90x
Sorry 🤦♂️ working on it!
If you keep the money in the FTMO account and not withdraw it is it taxable?
No, only when invoiced
Thank you for the video, exactly what I needed and straight to the point. Quick question, can dividends be paid out monthly? Because realistically, it’s not possible to live off the £700ish monthly salary.
Thanks Mohammed 👍
Yep dividends can be paid whenever you like (interim dividends), you just can't pay yourself money over what your liabilities would be by the end of the year. Aka you should put aside your tax money as you go along, as dividends aren't seen as an expense. So you'll need to work out what you can pay yourself ahead of paying tax if that makes sense.
If you earned let's say £10k just make an overestimation on deductions, keep aside £4.5k say for taxes, and your 732 would be salary, so you'd have about £4.72k that you could pay in dividends. If you over save on your tax, you can always pay yourself an additional dividend at the end of the year but it's always worth keeping money on account.
@@MatttoMillion Thanks for your reply Matt, really cleared it up for me. Much appreciated. 👍
Do that video please
Sure thing
Great video, just slow down abit when your talking
Thanks Danyaal - noted 🙏
Good video, but id say slow down a bit because when it comes to this stuff its a lot to take in lol
Thanks man! 🙏 Yeah, noted - got a bit carried away!
@@MatttoMillion It’s all good bro! Defo got me thinking, do you have any accountant recommendations?
@@IamSamuelSpeaks None that I can really comment on. I do a lot of preparations myself but I've heard that accountantsunlocked have an arm specific to forex/day trading
How about you pay yourself a wage, and once you’ve milked it, just liquidate the company and take all your cash
I had to check the video speed was not x2
My bad 😂
ITS THE FASTEST RAP EVER.......
🙌
can i have 1 personal ftmo account and 1 corporate frmo account?
I'm not 100% sure on that one unfortunately
could you reccomend an accountant good on forex?
Accountants unlocked - use code Matt1M when you contact them and they'll know you're with me
If I am from Dubai and not a UK resident, still I need to pay tax?
I make huge profits on my investment since I started trading with Anna Lawerence , her trading strategies are top notch coupled with the little commission she charges on her trade.
You can reach her on tele gram
Her user name is investwithAnnaLawerence
Question: Why Would someone pick TransferWise as the business bank account instead of a UK Business Bank account? I'm looking to set up an LLC for FTMO, I'm thinking what are the benefits of a TransferWise or monzo over a Traditional Bank account.
I wouldn't be able to comment on that really, don't have a very broad knowledge of different bank accounts and benefits etc. I've heard Transferwise have fairly moderate fees though
What if you are not getting paid a salary and are doing part time work?
If your part time work is self employed and separate from the ltd (I think it is as you mentioned Amazon flex deliveries), then in my opinion, I'd register your Ltd as a PAYE employer and register yourself as an employee. That way you can pay yourself the cost efficient salary from your company. (£732 per month) then you'd declare your self employed income on the self assessment as you would normally at the end of the tax year along with your dividend payouts.
@@MatttoMillion OK thanks for the advice man I'll keep a note of that for sure.👍🏼🙏
Good luck man!
Thanks for sharing some taxes advice, I'm French and I was thinking about making a similar system in France, but in France we need a licence to manage someone's money, it's very difficult to get this licence. How is it in Uk? It is not a problem to manage someone's money without the licence?
I guess on ftmo it's demo account but some other in Uk like city trader imperium.. it's a live account. Perhaps do you know how it works in this case? Thanks
Hi Dimitri, yeah you're right re: FTMO (I can't speak for CTI as I don't use them) but when it's just on a demo as it is with FTMO, you don't have direct control over any funds/manage any money.
@@MatttoMillion thanks for your reply but in this case you give financial advice?
giving financial advice does not also require a license or any certification in Finance?
Is it zero VAT because it is B2B ?
No, because of the location of the company you're charging. I.e. FTMO is in Prague
@@MatttoMillion |Thanks for the reply. Because it is outside of UK ? I am living in Sweden. I guess I need to pay 30% VAT because the transaction is with in EU. right?
So have to pay 20% vat on top of the tax?
No, you just need to register for VAT as a Limited company if your turnover exceeds £85k. You don't need to charge VAT on your invoices to the Czech Republic. But you will still to register for VAT as a limited company if your turnover exceeds (or is expected to exceed) £85k. In this example it's more to be compliant with UK law rather than reflecting any additional costs.
@@MatttoMillion thank you so much for the reply, your videos are brilliant!
Thanks Alfie - really appreciate it 🙏
Watch it in 0.75x speed🤣
haha good shout!
can you please slow down a little bit...
Yes
But massive question!!!why this uk thing just tax half of whatever we may be making!!!?honestly it makes me to leave uk right now!!!!!!!!!
It just extortion!! Trading forex do have no waste of anything just electricity they already taxed too!!!!!makes no sense!!!
Yep UK is some of the largest income tax in the world
Pay capital gains not tax..it’s better
Capital gains doesn't apply to prop unfortunately.