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HMRC internal manual

National Insurance Manual

HM Revenue & Customs
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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) is not included in the profit and loss account and is, therefore, not included in the calculation of net earnings. But the profit and loss account will include any loss or profit when business assets, such as plant, vehicles, etc, are sold. This is a capital profit or loss but properly reflected in the profit and loss account based upon accountancy principles. The loss or profit is calculated by comparing the value shown in the balance sheet and the amount obtained, if any.