Same Trade, Different Wrapper
Both let you go long or short on thousands of markets with leverage, without owning the underlying. A spread bet stakes £X per point of movement with a defined expiry (usually rolled automatically); a CFD trades contracts sized in units. Pricing, margin requirements, and platform experience at firms offering both (IG, City Index, CMC) are near-identical.
The Tax Divide
Spread betting is classed as gambling in the UK: no capital gains tax, no stamp duty, and losses not deductible. CFD gains are CGT-liable — but losses offset other gains, which matters for anyone also holding investments. Profitable traders generally prefer the spread-bet wrapper; those managing gains and losses across a portfolio sometimes prefer CFDs' loss relief. (Tax treatment can change; confirm current rules.)
Costs and Practicalities
Spread-bet costs hide entirely in the spread, slightly wider than CFD spreads at some firms once commissions are included — compare all-in on your specific markets. CFDs are the only option outside the UK/Ireland, and the natural choice for corporate accounts. Both carry identical leverage risk: the wrapper changes the tax, never the drawdown.