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HMRC internal manual

Debt Management and Banking Manual

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HM Revenue & Customs
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Debt and return pursuit: NICs: limitation: Debt Technical Office action

England & Wales and Northern Ireland

Arrears of NICs are subject to the restrictions of:

  • The Limitations Act 1980 for employers in England and Wales
  • The Northern Ireland Limitations Order 1989 for employers in Northern Ireland.

The time allowed, to enforce payment of a debt by civil proceedings, is restricted to six years from the date on which the cause of action accrued. DMBM527120 provides an example of how the six year limit is calculated.

Employers in Scotland are governed by the Limitation (Scotland) Act 1973, which provides for a time limit of 20 years.

NICs debts under six years old

DTOs should collect all National Insurance debts and interest that are due and payable within six years of their statutory due date, using all current enforcement methods.

If NICs debts are approaching six years old from their statutory due date then you must ensure within six years that either:

  • distraint is commenced, if appropriate, to recover the debt
  • a claim is commenced in the county court.

NICs debts over six years old

Section 9(1) of the 1980 Act means that you may receive a defence on the grounds of limitation if any of the NICs debt appears to be over six years old from the statutory due date. Your ability to recover it will depend on whether:

  • proceedings in court have already been commenced, either by a DTO or for Class 1 debts under appeal, by a protective claim raised by the DMB Protective Claims Team (PCT) in Longbenton
  • the cause of action date has been (or can be) advanced:

    • with the due date for any associated tax (for example Class 4 with SA)
    • where the debtor has made a payment on account of an admitted debt (for example Class 1 returned on form P35) or
    • through the concealment provisions in Section 32 Limitation Act 1980.

The issue is not straightforward and you will have to consider the particular case you are dealing with. More information is contained on the different classes of NICs in the relevant instructions in this section.

Scotland

You should take any of the normal enforcement methods. For further information, see the guidance relating to the specific class of NIC.