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HMRC internal manual

Compliance Operational Guidance

Alternative rights of recovery (PAYE directions): primary class 1 NICs: Employment Status & Intermediaries (ES&I) processes: initial review – limitation and the collection of NICs

Limitation Act 1980

When considering the prospect of recovery from an employee as part of your initial review, it is important to note that the Limitations Act 1980 prevents HMRC from taking legal proceedings to recover NI debts where such action has not commenced within 6 years from

  • the original statutory due date for payment (for Employment Status & Intermediaries (ES&I) cases the statutory due date would be 19 April following the end of the tax year for which the primary Class 1 NIC was under-deducted and unpaid), or
  • the date of DMB’s quantification and certification of the amounts due.

Section 32(1)(b) of the 1980 Limitation Act does allow for postponement of the commencement of the limitation period where ‘any fact relevant to the claimant’s right of action has been deliberately concealed from him by the defendant’. In such cases, ‘the period of limitation shall not begin to run until the claimant has discovered the concealment or could with reasonable diligence have discovered it’. Accordingly you need to consider the restrictions of the Limitation Act if you are making a decision for an old year.