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1. For class 1 NIC computation, what does it mean by “cash earnings”?
e.g. if the employee pays an occupational/personal pension, do I need to deduct those payments from his earnings and then calculate the Class 1 NIC?2. For class 4 NIC computation, what does it mean by “trading profit” ?
e.g. if the self employed person got a Capital Allowance, do I need to deduct the CA from the trading profit and then calculate the Class 4 NIC?Thanks a lot!
Cash earnings clearly means just cash payments received, salary, wage, bonus or commission received and excludes assessable benefits. The figure is also before deductions.
Trading profit is the adjusted trading profit that would be assessed in the income tax computation which is after deduction of capital allowances.
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