Tax on income when retired

Tridale

Hi,

Hoping that someone can help me out with this.

Both of my parents are now retired, for many years my Dad has enjoyed painting, and has a loft full of paintings from over the years, some of which are pretty good. In order to supplement their pensions they have the idea of selling prints of some of these paintings. A while ago I setup a website to display some of the paintings, and I'm been asked if I can set it up so that they can sell prints through it. Whilst I can sort out the technical part of this, I'm not sure what they'd need to do regards Tax. My parents seem to be under the impression that so long as they don't go over their Tax Free Limit, they don't have to do anything, I'm not so convinced, having had a search round the web, from what I understand I think they'd need to register as self employed.

I very much doubt they'd sell many Paintings per year through the website, I would guess at best they'd maybe sell £200-£300 worth per year, so it's not likely to take them over the amount tax free sum before they have to pay tax on it.

I just wanted to see if anyone could confirm what a retired person, who wants to sell Painting prints through a website would need to do regards Tax?

Thanks

McKneff

He would have to register as self employed.

Brighty

I assume your parents are receiving pensions? If so pensions, both state and private, are taxable income, so they may already be over their tax free allowance, so any extra income will be liable for tax.

Brighty

Tridale

Great, Thanks I did suspect that he would have to be registered as self employed, thanks for confirming that.

They do both receive a pension, I don't know the full details of their pension, as it's none of my business, but I'm told it doesn't take up their full tax free allowance.

I will now make sure he registers as self employed before I set this website up.

Cheers

sleepless_saver

He should phone the HMRC newly self employed helpline 0845 915 4515 to register. They are very helpful.

Have a look at this link too -http://www.hmrc.gov.uk/working/intro/selfemployed.htm.

He probably also needs to complete a CF10 form for exemption from Class 2 national insurance contributions as his self employed income will be low. It's available online and is very short and straightforward.

McKneff

Presumably as they receive state pension he wont pay any sort of NI contributions ?????

sleepless_saver

McKneff wrote: »

Presumably as they receive state pension he wont pay any sort of NI contributions ?????

I thought that just applied to Class 1 contributions, but have just checked and you're quite right. He doesn't need to pay any.