Starting up - advice and tax

R

roddy99

Hi:
I have been lurking for a while and now looking for some advice.

I am looking to trade from home (more or less fulltime) - I am based in the UK and looking for some advice:
1. Individual or sole trade or a limited company?
I am trying to work out whether it is better to trade as an individual or as a sole trade or as a limited company.
The key issues for me are whether 'trading' leads to capital gains or income tax; and whether expenses (eg computers and information services (eg Seeking Alpha Pro, Stockopedia and Bloomberg etc)) can be offset against profits. Anyone with insight who has been down this route and had experience with HMRC care to comment?

2. Whether it is best from home or a 'desk' in an office / trading arcade?
I tend to be a 'contemplative' trader - I am mainly equity focussed and historically been very 'deep dive' (ie can spend upto a month looking at a single stock). Historically I have found trading floors very 'noisy' (in all the senses of the word).

(I have also done faster trading - fastest ever was about an 80% return in about 30 seconds but it was an IPO we participated in. It was actually a 'bad' trade in many ways as the stock subsequently went up about 500% from the IPO price..... before going to nearly a zero. But at least we stuck to our trading plan.)

The question of an office might be separate from whether I go for a trading floor eg I am thinking - do I gain any benefit from renting a desk in a shared workstation in the City?

3. Whether I am being realistic or need a day job?
I figure I need a minimum target return of around 10% to justify and maintain my family's lifestyle. Is this achievable? What level of leverage should I use? Should I get a day job?

4. What do I really need?
Connectivity:
I have a BT broadband connection at home that delivers circa 40 - 50 Mbps downstream on most days. It can be a tad erratic but is generally stable. Fall back is to go to the local pub with a laptop. (I have resisted trading actively from home in the past as the previous BT connection was liable to stop when it was raining, too hot, too windy etc. Our electrician has improved the connection but I am still concerned until it has been 'battle tested').

Computers:
I have a decent Dell machine with decent screens.
And an aging Mac laptop as a fallback

Software:
I am contemplating if I need Bloomberg? I have used Bloomberg for around two decades but actually one of my big revelations was when I stopped using it for about a year - I found that going to company websites and downloading annual reports etc made me a much better investor. Nonetheless I do find Bloomberg useful but I do wonder about the cost and whether it is justifiable?

I also have a historic subscription to Seeking Alpha Pro which expires in a month or so. Ditto Stockopedia. And Barrons and the Economist. Should I renew these?

5. Background
I have been an analyst and fund manager on and off for around 2 decades. I was lain off earlier this year when my backer withdrew support for the fund I was running. I am realistic enough to recognise that the market for grey haired analysts and fund managers is distinctly limited.

Any thoughts appreciated.
 
Welcome,

All the question you have asked depends on how you trade and what your trading style is. No one here on the board can give you advise because we do not know how your trading is.

If you are consistent profitable, I personnaly think you should know al the answer you have asked, maybe except the tax issue, but then I believe if you are consistent profitable, you should seek advise from an expert and not from a forum.

If you are not consistent profitable, you need a job or other source of income, while you figured out. And only go full time if it is proved that you can make money on a consistend basis.
 
roddy99 said:
Hi:
3. Whether I am being realistic or need a day job?
I figure I need a minimum target return of around 10% to justify and maintain my family's lifestyle. Is this achievable? What level of leverage should I use? Should I get a day job?
More...
10% return over what time period? Month, year? If it is year, this venture should be very doable. If it is month, I suggest getting a day job.
 
Many thanks for the replies. Some more information:
1. I mentioned I had been in the markets for 2 decades ie 20 years. It has been mainly as a fundamental analyst / investor / portfolio manager. I have also done merger arb and some systematic / quant.
2. I have worked for a top tier hedge fund and then at a couple of other well known institutions
3. I have run money myself including in a number of hedge funds or equivalents.
4. Sustainable advantage - this is an interesting question that I will deal with in another post but basically I will read an annual report and look for homes.
5. i meant 10% return annualised.
6. Why am I asking in this forum? Because I appreciate trading for one's self is a different game from a large institution where you have dedicated staff in the back office, fund administrators and others to sort out things.
 
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