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HMRC internal manual

Debt Management and Banking Manual

HM Revenue & Customs
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Debt and return pursuit: NICs: limitation: application of Limitation Act 1980

Limitation Act 1980

England and Wales

The Limitation Act 1980 applies to the recovery of debts in England and Wales. Section 37(2) of the Act confirms that tax and ‘other duties due to the Crown’ are specifically excluded from the provisions of it, but NICs are not.

Section 9(1) of the Act provides that an action to recover a debt and any interest must be started within six years “from the date on which the cause of action accrued.”

The date on which the cause of action accrued is the statutory due date of the liability.

This means that HMRC must commence its court action to recover a NICs debt within six years, or limitation can be raised by the debtor as a defence to the action. Once an action has been commenced in time, a defence of limitation can be defeated and the question of limitation cannot be raised later (for example, after judgment has been entered).

Calculation of six year limit

Earnings paid to 30 June 2005:

  • date due for payment of NIC to HM Revenue & Customs by 19 July 2005
  • six year period starts 20 July 2005
  • six year period ends 19 July 2011
  • NICs time barred from 20 July 2011.

Northern Ireland

Limitation applies to the collection of National Insurance in Northern Ireland and references to the 1980 Act should be read in Northern Ireland as The Limitation (N. Ireland) Order 1989. Article 74(2) excludes “tax or duty or interest thereon” from the provisions of the Order, but not NICs.

References in this section of the DMB Manual to county court proceedings should be read in Northern Ireland as High Court proceedings, and it should be noted that Enforcement and Insolvency Service Office, Belfast carry out protective claim work in Northern Ireland.


The 1980 Limitation Act does not apply in Scotland. Instead, employers in Scotland are governed by the Limitation (Scotland) Act 1973 which provides for a time limit of 20 years. Where enforcement action is required for a NICs-only debt, cases should continue to be sent to EIS Edinburgh.

If the NICs are collected with tax then they should be enforced as at present.

The effect of the 1980 Act

The Limitation Act 1980 has a direct impact on HMRC’s ability to recover National Insurance debt, and further information is at DMBM595080.

The widespread use of National Insurance avoidance schemes and the large amounts of NICs at stake have raised the profile of the limitation issue. As a result debt technical offices will often be faced with a refusal to pay older National Insurance debts of all classes on the grounds of limitation.