Overdue Tax? This new initiative could help
Inland Revenue has introduced a new pilot programme aimed at helping taxpayers manage overdue income tax through tax pooling.
This approach builds on a similar extension used during COVID-19, giving taxpayers more time and flexibility to access tax pooling funds. If the pilot proves successful, it may become a permanent feature of the tax system.
What this covers
This initiative applies to income tax debt from the 2022-23 and 2023-24 income years, regardless of your balance date.
To participate, you must enter into an agreement with a tax pooling intermediary by 1 October 2026. The outstanding tax must then be settled by 1 October 2027.
Who Can Apply
Eligibility is focused on taxpayers who are generally up to date with their tax obligations.
You will not qualify if you are:
bankrupt or in liquidation
under insolvency or legal recovery action
behind in filing tax returns
behind on other tax payments
However, if you are already working with Inland Revenue under a payment arrangement, you may still be eligible to take part.
What This Means
This would provide a practical option for managing historical tax debt, particularly where cash flow has been tight. Tax pooling can allow you to meet your obligations in a more flexible and potentially cost-effective way compared to standard Inland Revenue interest.
With extended timeframes now available, this could make it easier to catch up on past liabilities without immediate financial strain.
If you have overdue income tax, it may be worth exploring whether this option is suitable for your situation.
Get in touch if you would like to explore tax pooling through TMNZ.