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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: deliberate concealment - Section 32(1)(b) Limitation Act 1980

Section 32(1)(b) of the 1980 Limitation Act postpones 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.”

Debt technical offices will have to examine NICs debts over six years old critically

  • to decide if the particular circumstances can support the advancement of the relevant limitation date and, if so,
  • to establish a clear alternative date from which the cause of action begins to run.

The particular circumstances of each case will be different, but common areas to examine to support an argument that the facts have been concealed are:

  • when was the NICs liability due?
  • were returns detailing any NICs liability returned? It may be that concealment is deliberate if returns have not been received
  • was the relevant SA return, P11D, P11D(b) or other return or accounts submitted late? If so, concealment was only temporary and may not have been deliberate, but the longer the delay, the more likely it is to have been deliberate.
  • what was the first date that the department could have taken action to pursue the debt?

If you can identify a clear event that will advance the relevant date for the NICs debts and it is still less than six years from today, then you should

  • continue pursuit of the liability in the normal way and
  • ask the debtor for payment
  • start county court proceedings as necessary.

If after consideration you are unable to make a case to advance the relevant date for limitation purposes you should

  • remit that part of the NICs liability against which a defence of limitation would be successful
  • pursue any in-date NICs and the tax as normal.

If you need further advice contact the Enforcement Technical Team (Debt Management Bradford).

Employer Compliance cases

In Employer Compliance cases, such as large Class 1 avoidance liabilities sent to the DMTO to enforce, a decision will have been made as to whether the relevant date can be advanced under the concealment provisions for any NICs debt over six years old and will be noted on the papers.