The Limitations Act 1980 restricts the period during which a claim for any debt may be brought. HMRC is not subject to these limitations for the recovery of tax or duty, due to specific provisions within this Act, but as National Insurance is a contribution rather than a tax, NI claims have been restricted within the boundaries of this act.
The government is addressing this and has now confirmed that NI will be removed from the effects of the Limitations Act 1980 from April 2018. This effect will align the time limits for the recovery of tax and NIC and the recovery process for enforcing NI debts with other taxes. The finer details on how these changes are to be consulted on and further information will be provided by Government in due course.
Following the Office of Tax Simplification (OTS) recommendations, NI for secondary (employer) and primary (employee) NI thresholds will be aligned as from April 2017. The effect of this will mean that both employer and employee will start to pay NI on weekly earnings above £157. Whilst this may mean a higher NI bill for some employers, it is seen that this will be a fairer systems for those individuals engaged for example, under zero hours contracts or, are employed in a number of roles.
It is expected that this alignment will simplify the payment of NI for employers and lead to less administrative burden for employers.