Basically, when you trade CFDs, you’re basically buying and selling contracts that follow the price changes of things like stocks or commodities. Because you’re dealing with financial stuff, any money you make from this is subject to capital gains tax, which is what the taxman takes from the profit you make when you sell something for more than you bought it for.
On the other hand, spread betting is seen more like gambling. When you do spread betting, you’re essentially making a guess on whether the price of something will go up or down without actually owning that thing. Since it’s viewed as a form of betting, the money you make from it is tax-free in the UK and Ireland. That means you don’t have to pay capital gains tax on your winnings from spread betting.