If HMRC assess an underpayment of National Insurance Contributions (NICs), their recovery powers are different compared to those for assessed Income Tax underpayments. A 2026 consultation seeks to align NICs and Income Tax.
Currently, if HMRC believe there is an underpayment of Income Tax or NICs, they must assess the liability. Here is where the similarity ends:
- For Income Tax, if the underpayment is assessed within time limits (up to 20 years), this creates an enforceable debt and there is no time limitation applicable to recovery;
- For NICs, however, the assessment of a liability does not create an enforceable debt, only a civil debt (and assessment is complicated by the fact there are different Classes of NICs). Except in Scotland, assessed civil NICs debts are subject to the 6-year time limit set out in Limitation Act or Northern Ireland equivalent
Autumn Statement 2016 (point 4.9) advised that, subject to consultation, the UK Government would seek to align the time limits and recovery process, removing NICs from the Limitation Act 1980.
On 13 July 2026, the UK Government started consulting for the first time since the 2016 announcement. Essentially:
- Like Income Tax, HMRC will have to issue a statutory Notice of NICs Liability within the prescribed statutory time (up to 20 years); then
- NICs assessment and recovery rules will be aligned with those applying to Income Tax by removing NICs from the scope of the Limitation Act 1980 and Northern Ireland equivalent
For Bookkeepers
Alignment would create simplification by having a uniform approach to assessment and recovery.
There are two ways to respond by 12 October 2026:
- By E-Mail: to nics.policy@hmrc.gov.uk; or
- By post: to Individuals Policy Directorate, Room 3/E01, HM Revenue and Customs, 100 Parliament Street, London,