Profits for Class 4 NIC purposes are calculated in the same way as for income tax. However, the following deductions are specifically permitted (SSCBA 1992, Sch. 2, para. 3):

trading losses set-off against general income:

for the current or preceding year under ITA 2007, s. 64; and

in the early years of a new trade under ITA 2007, s. 72

as long as the loss arises from activities the profits of which would be brought into account for the purposes of calculating Class 4 contributions;

trading losses carried-forward against subsequent profits of the same trade under ITA 2007, s. 83;

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