The Forex industry in the United Kingdom is perfectly legal and regulated by the FCA (also known as Financial Conduct Authority). This regulatory body operates independently and controls all financial services in the country, ensuring the protection of customers and generally, keeping the industry safe and stable. The FCA is the main reason why trading Forex in the UK is one of the most popular activities as the rights of clients are highly protected.
Traders from the UK have to pay taxes, however, it depends on what kind of trader you are. Generally, you can either be tax-free or subject to Capital Gains Tax which goes up to 20%.
The local currency of the country – GBP plays a huge role in Forex as it is the 4th most popularly traded currency and directly represents the economy of the country, which is obviously very strong. Considering the fact that the British Pound is very fluctuating after Brexit, makes it an attractive choice for investors around the world.
Currently, the leverage ratio in the country is restricted to 30:1 for retail traders but professional traders can enjoy maximum leverage of 500:1.
It will be no surprise to say that traders from the UK have the privilege of using some of the most popular payment methods including debit/credit cards, e-wallets, and most importantly – PayPal.
Forex is one of the largest and most dynamic financial markets in the United Kingdom. That’s why hundreds of brokerage companies appear on the market every year and traders from this country get more and more diverse options for which broker to choose. Therefore, it is extremely important to identify the most beneficial and advanced trading platforms and the best offers from the brokers. Below is the list of the top Forex brokers in the UK.
5$
CySEC, FCA, ASIC
30$, 50%+20%
1:1000
2009
MT4, MT5, WebTrader
$100
CySEC, CBI, FSA, FFAJ, BVI FSC, FSCA, FSRA
1:400
2006
MT4, MT5, WebTrader, AvaTradeGO
USD 5,000
FINMA, FCA, ASIC, FSA, MAS, AFM
N/A
1:30
1992
SaxoTraderGo, SaxoTraderPro
$5
SVGFSA, FCA, DFSA, FSCA, FSA
From 30% to 100%
1:1000
2010
MT4, MT5
15
CySEC
30%
1:500
2015
MT4, WebTrader
$250
FSCA
1:200
2012
MT4, WebTrader
100$
FCA
N/A
30:1
2008
Custom
$10
Risk Warning: YOUR CAPITAL MIGHT BE AT RISK
N/A
1:1000
2013
Proprietary
10 USD
FCA, CySEC, FSA
N/A
1:Unlimited
2008
MT4, MT5, WebTerminal
$10
N/A
N/A
1:500
2019
MT4, custom
$10
1:500
MT4
250$
FCA, NFA
N/A
200:1
1999
MT4
$25
ASIC, CySEC, FSA, BVI
50%
1:400
2001
WebTrader, MT4, TradingView
100
FCA, CySEC, DIFC, CIMA
N/A
500:1
1977
MT4, MT5
$100 AUD
ASIC
N/A
500:1
2005
WebTrader, MT4, MT5, IRESS
AUD$200
ASIC, SCB, CMA, CySEC, FCA, BaFin and DFSA
N/A
1:400
2010
MT4, MT5, cTrader, TradingView
250 EUR
FSA (Seychelles)
None
1:200
2023
FXRoad web & mobile platforms
$50
N/A
N/A
1:500
2015
MT4
1 USD
ASIC, FCA
10 USD
1:500
2005
MT4, MT5, WebTrader
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
When it comes to Forex brokers in the United Kingdom, one over-arching regulatory body is in charge of controlling the broker houses that are registered on the British territory. The name of that agency is FCA, which stands for Financial Conduct Authority. This regulatory body was granted its royal assent in 2013, which means that for the last couple of years, all operations and activities in the Forex market have been monitored by the FCA.
Since this agency operates independently, i.e. it is not controlled by the government, FCA is financed by charging fees to UK FX brokers. Even with such a structure, it is estimated that the annual budget of this organization is somewhere around £450 million, which is an impressive amount by all means. It speaks a lot about the significance of the organization and the amount of attention granted to it.
The FCA’s preceding agency, called FSA (Financial Services Authority) was replaced by this modern version during the reforms that took place in 2013. In 2015, another slight modification of the system took place, and FCA created a separate regulatory structure, which was named PSR (Payment Systems Regulator). As the name clearly suggests, this agency focuses on banking methods that are used in the Forex trading market. The role of the FCA is vital in keeping the forex trading market under control. Forex market needs monitoring in every part of the globe since the risks of losing the financial resources are already too high, and having a regulatory body with such integrity is a major factor for the best Forex brokers UK as well.
Other powers vested in FCA include the “power” to regulate the conduct of retail brokers in the UK. Also, it has the right to specify the standards of operations for those broker houses, i.e. to place direct requirements on how these companies should treat their customers and which actions they must take to protect the safety of their client’s funds and personal information. Of course, just like any other “police unit” in the world, FCA is entitled to conduct investigations and audits about certain activities and operations in the Forex trading scene, and if some irregularities appear – this regulatory body can issue a temporary or a permanent ban. Evidently, the role of the FCA of the utmost importance for the survival of the entire foreign exchange market in the UK, and that is why UK Forex trading brokers are eager to comply with the necessary rules and regulations.
Trade with an FCA-regulated broker – HotForex
As in the majority of countries around the world, Forex trading is also taxable in the UK. If you are a Forex trader and your annual income is less than 50,000 GBP, then you have to pay 10% of your profits. Total income of more than 50,000 GPB will result in a Capital Gains Tax of 20% in total.
In case you are considered a part-time spread betting trader, whose main goal is not making profits for a long period of time, then congratulations, you are tax-free and don’t have to share anything with the government.
It is important to note that the amount of tax you pay can depend on many other things as well. The amount can vary – for instance, if you are short time trader (speculator) you will have not have any debt to anyone, while in other cases (being an investor) you will have to pay taxes on the profits you make. That’s why we advise you to do research so you are fully aware of the tax implications that you are going to face after your trading is done.
Considering the fact that GBP is one of the strongest currencies in the Forex market, you will be able to find accounts/currency pairs in GBP with the majority of reputable brokerage companies, which is very good news indeed. The pound is a floating currency which makes it possible for customers to buy/sell the currency in an international market without any difficulties.
The British Pound has one of the highest values and is pretty popular among investors due to several important factors. You will definitely know that London is the world’s biggest financial center and this fact alone already contributes a lot to the high amount of the Pound. The country has the fifth-largest economy, which is mostly dominated by the service sector. Of course, there also are other factors that affect the strength of GBP such as monetary policies controlled by the BoE (the Bank of England), GDP, inflation, and political news.
Start trading GBP with AvaTrade
Yes, Forex companies in the UK, have a cap on leverage. The retail clients are restricted to 30:1 leverage, while other kinds of traders can use the maximum ratio of 500:1. This is due to the fact that high leverage can be quite risky and is a double-edged sword. While it is true that professional traders often make huge profits from it, they also lose all their funds quite frequently. That’s why the majority of financial regulatory bodies put restrictions on it.
Wherever you trade, we advise you to stay within the limits. The industry’s standard is somewhere between 200:1 and 300:1, meaning that it might not be a good idea for you to go above that, especially with unregulated Forex brokers as there is a high chance that you will get scammed.
The UK is a perfect choice if you wish to have a lot of payment methods at your disposal. The clients have the possibility to choose from Visa, Mastercard, Neteller, Skrill, and Wire transfers. However, it is important to note that wire transfers are not as comfortable as other methods as they can be more expensive and slower, which makes your trading experience not very enjoyable.
The most popular payment system with Forex brokers in the UK remains PayPal due to the simple fact that it is fast and easy to use. The usage of this provider in Europe is highest in the United Kingdom and Forex trading takes a significant part of it. It is important to note that each payment method comes with its own specifications and requirements. For instance, PayPal mostly offers the fastest transaction speed that can go up to 1 working day. Visa/Mastercard can go up to 5 working days, while Wire transfers take 10 working days in total. Making deposits and withdrawals sometimes can come with additional fees, so it is never a bad idea to check terms and conditions before choosing a specific payment system for your future transactions.
Trading with currencies can be a highly exciting and profitable activity, and that is why Forex brokers from the UK can be a great solution for anyone interested in this type of financial investment. However, it is important to take certain precautions when embarking on this adventure, and the turbulent seas of the financial world may not be everyone’s cup of tea. But, if you pick the right company and use the appropriate tactics – there is no reason why your money should not “grow” at a very fast rate.
The Forex market is quite confusing and difficult when you are not familiar with the industry and don’t know all the basics that you might need in the trading process. One of the most important things is to know the basics and that’s why we have made multiple guides for you to check your knowledge. You can either read our article for beginners in the Forex market or how to start Forex trading. Making multiple trading strategies can also help you perform better and make more profitable trading decisions.
Other than that, it is also a good idea to go for platforms that offer nice customer service, which directly reflects the quality of a specific platform. While trading, there is a high chance that you have some issue with a specific instrument and the availability of a helpful support team can easily help you avoid negative consequences. Mostly, top Forex brokerage companies have a live chat option integrated into their webpage, giving you the possibility to get in touch with the company in a matter of seconds.
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