NIM18130 - Class 1B NICs: Liability: Underpayments

Paragraph 17 of Part III of Schedule 4 to the Social Security Contributions Regulations 2001 (SSCR 2001) (SI 2001 No 1004)

Where an underpayment is identified and if the Class 1B NICs liability is not paid by the due date, HMRC will enforce payment using the normal mechanisms.

HMRC will use the same avenues of recovery which are open to them for tax purposes.

This includes the charging of interest, under Paragraph 17 of Part III of Schedule 4 to SSCR 2001, and taking legal proceedings.

If an employer disputes that there is an underpayment of Class 1B NICs liability and the matter cannot be agreed, a formal decision should be issued under section 8 of The Social Security Contributions (Transfer of Functions, etc) Act 1999 or, in Northern Ireland, The Social Security (Transfer of Functions, etc.) (Northern Ireland) Order 1999. This will provide the employer with a right of appeal – see DANSP33000 for more information. 

It should also be noted that the recovery of Class 1B NICs is subject to the six-year time limits of the Limitation Act 1980 and The Limitation (N. Ireland) Order 1989. The Prescription and Limitation (Scotland) Act 1973 applies in Scotland and provides for a time limit of 20 years.