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Is Your Case Over 6 Years Old?

Paula23rd November 2013

(Updated 15 July 2014)

The Limitation Act 1980 basically says that most debts that have not been pursued or had repayments made (see note 1 below) on them, within 6 years of the bill first becoming due (see note 2 below), should be considered ‘statute barred’ (i.e. unenforceable). For the Scottish Prescription and Limitation Act 1973, the time frame is only 5 years.

We are having an ongoing, and ever changing, debate with HMRC as to whether the Limitation applies in some or all tax credit cases. HMRCs typical response is to say that ‘limitation does not apply’, and that they ‘can still seek recovery’, however I am very suspicious of their terminology.

We do know that HMRC’s own manual DOES say it applies to TC overpayment (See the HMRC manual regarding the Limitation Act 1980) and that we now have hundreds of cases that have now been dropped despite HMRC trying to insist limitation does not apply.

The Scottish Prescription and Limitation Act 1973 has an extra emphasis that because the debt is statute barred, the creditor (HMRC) are prevented from taking legal action.

The English version is missing this particular emphasis, so this may be what HMRC are trying to utilise (in English cases) when they claim that they can still ‘ask’ for repayment.

Due to vast experience of HMRC deceptive tactics, I am not prepared to accept anything HMRC have to say on the matter, and so I suggest everyone keeps pushing each case through the usual dispute process, until you reach the Adjudicator Office stage, so as to get the AO to comment on each case or across the board on the issue.

I have been advising people to refer their limitation cases to the Adjudicators Office for some time now, and have yet to receive a full response from the AO on any of them. As such, I suspect the AO are either trying to ‘keep out of it’ or are possibly awaiting legal advice themselves.

I hope to force a response eventually, (even just by sheer weight of numbers), not least because having a response to one case should mean we can use that decision as a precedent in other cases, shortening the fight and making it more clear cut for those coming up behind.

You need two rounds of arguing any dispute issue with HMRC before you can address that issue to the AO, and so the following steps are how we suggest invoking Limitation/ Prescription in TC overpayment cases. For Scottish cases, please replace ‘Limitation Act’ with ‘Prescription Act’, and ‘6 years’ with ‘5 years’, wherever it appears in any of the template letters below:

Step 1

Use this template letter to first raise the issue of Limitation or Prescription with HMRC: Step 1 Limitation Act Letter Template

Step 2

Use this template letter if and when HMRC respond with a load of blather that ‘limitation does not apply’, or ‘does not restrict’ them from seeking repayment: Step 2 Limitation 2nd Round Letter Template

Step 3

When HMRC respond to your step 2 letter it will be in one of two ways:

  1. To carry on denying it, or
  2. To suddenly confirm the overpayment has now been dropped (usually without admitting that this is due to limitation).

So once HMRC respond to Step 2, you can refer your case to the AO. Please use both of the following template letters:

  1. To tell HMRC that you are referring your case to the Adjudicators Office:  Step 3 Limitation Final HMRC Template Letter, and
  2. To refer your case to the Adjudicators Office: Step 3 Limitation AO Referral Template Letter

Due to how completely swamped the AO are with Tax Credit Overpayment cases these days, this will effectively put your case into stasis until the AO can investigate fully – but don’t forget to see our Harassment page if you do get repayment demands.

After That

We have yet to get a response from the Adjudicators Office (for over 18 months so far). I hope to force a response eventually, which should mean we can use that decision as a precedent in other cases, shortening the fight and making it more clear cut for those coming up behind. I will update this page as soon as we do get our first response. Meanwhile, if you do get a response from the AO that is anything other than an acknowledgment of your letter, please contact me to let me know.


  1. Regarding ‘no repayments made’ – I feel when repayments were only taken by automatic recovery from a Tax Credit award, that these should not be considered repayments under the Act, as you had no choice over these deductions and no ability to stop them happening. So it is my belief that this method of repayment does not mean the same as acknowledging that you owed the debt.
  2. Regarding ‘date the bill became due’ – The date of when the bill first became due is usually within 3 to 6 months of the end of the tax year that overpayment is for, as this is when awards are usually ‘finalised’. It is not the date of the first time HMRC contacted you about the debt, which in many cases is often years later. So if the bill is from tax year 2005/06 its very likely that ‘debt became due’ sometime around June 2006. I currently work on the basis that overpayment bills due for tax year 2007/08 and before are applicable to invoke the Act (2008/09 for Scotland) as long as no repayments have been made, but if you are unsure you could always just ask HMRC in a very simple one line letter when the bill became due. Or just do what I usually do and assume it’s within 6 months of the end of that tax year. Just let HMRC point it out if I’m wrong.

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