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HMRC internal manual

Debt Management and Banking Manual

HM Revenue & Customs
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Pre-enforcement: coding out: class 2 NIC debts: debts become time-barred

Class 2 NIC debts become time-barred after six years. Every April, a scan is run in NPS(NI) to identify any time-barred debts and reduce them to nil. An update is then sent to IDMS to reduce the debt to nil and close down the IDMS work items.

The six-year rule does not apply to Scottish cases as employers in Scotland are governed by the Limitation (Scotland Act 1973) which sets a time limit of 20 years. It is, however, difficult to identify Scottish cases on NPS(NI) and these debts will therefore be included in the ‘time-barred scan’. If required, the write-off can be reversed and National Insurance Contribution & Employers Office (NIC&EO) will deal with these cases on an individual basis.