Labour proposal would shorten NI refund window while extending HMRC collection period

HMRC has opened a consultation that would shorten the deadline for workers to recover overpaid National Insurance contributions from six years to four. Simultaneously, the draft measures would extend the agency’s authority to recover unpaid contributions from six years to twenty years. The proposal lacks any estimate of the financial impact on households and does not safeguard existing claims for the 2020-21 or 2021-22 periods, meaning claimants could lose refunds they have not yet filed.

HMRC says no final decision has been taken and asserts that no one will be disadvantaged. Shadow Chancellor Andrew Griffith responded that the plan appears designed to raise cash before the budget and would unfairly penalise ordinary taxpayers. The debate highlights differing views on tax fairness and HMRC’s enforcement powers.