NIM21005 | Class 2 National Insurance Contributions: Small Earnings Exception: How Net Profit is calculated

The net profit figure was arrived at by deducting from the gross business takings or earnings the cost of goods sold and the day to day operating expenditure. Guidance on capital expenditure, which was not deductible, is at NIM21007, and on admissible expenses at NIM21011. It should be remembered that the profit or loss follows accountancy principles and was not necessarily the profit or loss for Income Tax purposes.