NIM21006 - Class 2 National Insurance Contributions: Small Earnings Exception - How Net Profit is calculated: Capital items

Capital items were not normally included in the profit and loss account.

The assets of a business which were retained and used to earn profits were termed capital items and included business premises, plant, machinery and vehicles. This was a different concept to the trader’s stock which was sold to make a profit.

Machinery was self-explanatory but “Plant” caused some difficulties in interpretation. Plant meant the apparatus used by the business, that is fixed or movable goods which were kept for permanent employment in the business rather than the goods obtained for resale. Examples were movable office or shop partitioning, display, shelving and storage units, tables, cupboards, etc.