A1.706 Time limits
For the latest New Development, see ND.812.
Under English law there is no time limit on the commencement of proceedings by the Crown in the High Court for the recovery of tax or interest on tax1. The Limitation Act 1980, s 37(2)(a) does not apply to such proceedings and the time limits contained in the Taxes Acts are concerned with the making of assessments and claims for relief and repayments. In the forthcoming National Insurance Contributions Bill the Government will also remove NICs from the effects of the Limitations Act 1980 and Northern Ireland equivalent in order to align the time limits and recovery process for enforcing National Insurance debts with other taxes (see ND.812).
It was held in Lord Advocate v Butt and Others2 that the position in Scotland is the same. The taxpayers in that case had argued that the Revenue's right to recover tax and interest on tax was subject to the five-year time limit imposed by the Prescription and Limitation (Scotland) Act 1973, s 6. That section applies, inter alia, to 'obligations of accounting' and to obligations to pay interest3. However, the taxpayers' argument that the receipt of income and the statutory charging provisions together amounted to an 'obligation of accounting' within the scope of s 6 was rejected; the court held that the obligation to account for tax (by making a return) was a separate obligation from the obligation to pay tax arising from an assessment.
The court also rejected the taxpayers' claim that the