ECH22131 - Settlement: Time Limit for Recovery - Limitation Act 1980 and Limitation (Northern Ireland) Order 1989
NICs are a civil debt. 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. So unless there is evidence of fraud or
deliberate concealment NICs are subject to the restrictions of the
Act.
Employers in Scotland are governed by the Limitation
(Scotland) Act 1973, which provides for a time limit of 20 years.
The calculation for the six year limit is not tax year based,
for example, earnings paid to 30 June 1995
date due for payment to HM Revenue & Customs by 19 July 1995
six year period starts 20 July 1995
six year period ends 19 July 2001
NICs time barred from 20 July 2001.
If it is possible that NICs may become time barred before the anticipated date of closure of the review the caseworker should
- send
a
letter to the employer
-
- inviting them to make a payment specifically on account of the identified NICs and associated interest and
- advising that if a specific payment on account is not made the Department will seek to protect it’s ability to recover the arrears by taking court action, and will seek to recover any court costs incurred from the employer
If the employer fails to make a specific payment on account within 40 days the caseworker should refer the case to the ECUM to consider
- the issue of NICs Decisions for all NICs arrears identified ECH22091 and
- the issue of Protective Claims for all NICs arrears identified and the interest thereon.
Where a Protective Claim is appropriate the senior manager should arrange to
- Send a schedule of the NIC due, interest thereon and details of payments on account made, to the employer with an appropriate letter
- Send a completed stencil to
- Debt Management Unit (Tyneside) for employers in England and Wales
- Enforcement & Insolvency Service Belfast for employers in Northern Ireland
The stencil includes a list of information and documentation which should be attached.
- Record the details in the Establishment File ECH3518
