1017-800 Profits or gains for Class 4 contributions
The charge to Class 4 for any tax year is based not on ‘earnings’ but on ‘all profits … immediately derived from the carrying on or exercise of one or more trades, professions or vocations … chargeable to income tax under ITTOIA 2005, Pt. 2, Ch. 2 for the year of assessment corresponding to that tax year and are not profits of a trade, profession or vocation carried on wholly outside the UK’ (SSCBA 1992, s. 15(1)). Profits are calculated in accordance with normal ITTOIA principles, subject to adjustment under SSCBA 1992, Sch. 2.
There are several key points about the profits in this charging rule: