NIM21008 | Class 2 National Insurance Contributions: Small Earnings Exception: How Net Profit is calculated: Sale of capital item

Money realised from the sale of a capital item (for example a surplus freezer) was not included in the profit and loss account and was, therefore, not included in the calculation of net earnings. But the profit and loss account did include any loss or profit when business assets, such as plant and vehicles were sold. This was a capital profit or loss but properly reflected in the profit and loss account based upon accountancy principles. The loss or profit was calculated by comparing the value shown in the balance sheet and the amount obtained, if any.