NIM17605 - Class 1A National Insurance contributions: Collection and reporting: The Limitation Act 1980

You will find comprehensive guidance about the Limitation Act 1980 and its effect on NICs in the Debt Management and Banking Manual (DMBM).

Important Points

There are some important points to bear in mind when trying to collect and enforce payment of Class 1A NICs.

  • The Limitation Act 1980 applies to the recovery of debts in England and Wales.
  • 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.
  • Employers in Scotland are instead governed by the Limitation (Scotland) Act 1973 which provides for a time limit of 20 years.
  • The Limitation Act 1980 does not absolve the debtor from National Insurance debt that is due and payable.
  • The Limitation Act does not allow us to enforce payment of Class 1A NICs which were due to be paid more than six years ago unless there has been deliberate concealment or fraud, see DMBM527140. Class 1A NICs due to be paid by 19 July 2015 became six years old on 19 July 2021. We cannot take action to enforce payment unless there has been deliberate concealment or fraud.
  • HMRC can make a County Court claim to protect NICs and interest due on the NICs as long as a claim is issued within the time limits. Such claims are referred to as protective claims. The debtor cannot then successfully argue against a claim for NICs and interest on the grounds that it was out of time.
  • If unpaid Class 1A NICs are within three months of the end of the limitation period described above, ask Debt Management to make a protective claim, see DMBM527150 and DANSP15800.
  • If a debtor refuses to pay National Insurance contributions that are more than six years old on the grounds of limitation, do not collect this part of the debt or commence proceedings if a defence of limitation would be successful (does not apply to Scotland).
  • Decisions issued under section 8 of the Social Security Contributions (Transfer of Functions, etc) Act 1999 do not:
    • protect a debt from the effect of the Limitation Act 1980
    • have to be issued before a protective claim is made (see DANSP14100)
    • prove a debt, they provide a right of appeal to a tribunal.

Example

Class 1A NICs due - 19 July 2014

Six year limitation period ends - 19 July 2020

Three months before limitation period ends - 19 April 2020