When the GST return is due and the bank balance doesn’t cover it, the pressure feels immediate. The useful news is that the next few days matter more than the next few minutes. Acting before the due date keeps your options open with Inland Revenue (IRD), and a calm plan beats a rushed one.
This guide is for owners who know GST is coming and can see a gap. It is general information, not tax, legal or insolvency advice; your accountant is the right person to confirm the detail for your business.
What should I do before the GST due date?
- Confirm the date and the amount. IRD says a GST return and its payment are both due by the 28th of the month after your taxable period ends. Two periods are different: a period ending 31 March is due by 7 May, and one ending 30 November is due by 15 January. See IRD’s GST filing page.
- File on time, even if you can’t pay in full. IRD states that you cannot get an extension of time to file a GST return, and that you must file for every period, including nil returns. Filing and paying are separate problems. Solve the first today.
- Work out the real shortfall. Check the return against your accounts, then list what is genuinely coming in before the due date: customer payments, a refund, an asset you can sell. A cash-flow statement shows timing gaps that a profit figure hides.
- Pay what you can. A part payment on time is usually a stronger starting point than silence. Keep a record of what you paid and when.
- Contact IRD before the due date. IRD asks people who are struggling to get in touch early, through a message in myIR or by phone, before the situation gets worse. Explain the verified position and what you can pay now.
What will IRD ask for, and what can it offer?
On its page for people who are struggling to file and pay, IRD says it may ask for financial information to understand your situation. For business customers that can include a twelve-month cash-flow forecast. Having a simple, honest forecast ready makes the conversation faster.
Possible outcomes include:
- An instalment arrangement, where you agree to repay set amounts weekly, fortnightly or monthly. IRD describes this as a form of financial relief, not a method of payment. Interest and penalties can keep accruing while the balance is outstanding, so it reduces pressure rather than cost. Details are on IRD’s instalment arrangement page.
- Relief from penalties. IRD says that if you cannot meet your payments it might be able to write off penalties or certain amounts. That is something to ask about, never something to assume.
Late payment penalties are charged in stages once a due date passes; IRD’s penalties page explains how they work and links to the waiver process. The earlier you talk to IRD, the less the debt tends to grow while you sort out a plan.
Is this a one-off gap or a structural problem?
A one-off gap usually has a clear cause: a large customer paid late, a seasonal dip, an unexpected repair. The sales are real and cash will arrive; it just landed after the GST date.
A structural problem looks different. Warning signs include:
- GST has been hard to pay for more than one period in a row
- the business regularly spends the GST it collects on day-to-day costs
- margins are too thin to cover tax, wages and suppliers together
- other creditors are also running late
If any of those sound familiar, new borrowing may only move the problem to next quarter. Ask your accountant to test margins, collections and your next two GST dates before you commit to anything. Business.govt.nz’s guidance on signs of financial trouble is a useful checklist. If a company cannot pay its debts as they fall due, directors should get professional advice promptly; the Companies Register cautions against taking on obligations the company cannot meet.
When could business finance help?
HomeSec is a direct, open-term lender of business loans secured by New Zealand real estate. We lend $20,000 to $1,000,000 for genuine business purposes, and we can discuss a business that has fallen behind with IRD without treating that as its whole story. Where the cause is a temporary timing gap and the business has suitable property, a loan can sometimes clear the GST balance and stop penalties building while the business gets back on its feet.
Assessment still looks at the security, the legal position, the amount, the use of funds and how the facility would be repaid. Approval is never automatic. In some complete cases, funds can be available in as little as 24 hours once the scenario is complete and the security is acceptable. For approved facilities, there can be up to six months with no scheduled payments, although interest and fees can continue to accrue. Offering property as security has serious consequences if the facility isn’t repaid, so compare the full cost with your accountant first. If you want to see how a scenario is put together, read how to prepare a business loan scenario.
When borrowing is not the answer
Finance is the wrong tool if:
- an IRD instalment arrangement would solve the problem at lower cost
- the business loses money on each sale, so more debt only buys time
- the real issue is a disputed invoice, a pricing problem or a stock problem
- you have no credible plan for the next GST due date
If the broader picture involves other tax types or an overdue notice, start with our guides to what to do after an overdue tax notice and IRD tax debt options for business. Our IRD tax debt loans page explains how a property-secured facility could fit alongside those options.
A useful first conversation
Tell us the GST amount, the due date, what caused the gap, when the money arrives and the property available as security. That is enough to tell whether finance would create real breathing space. See whether there is a workable funding option.
Frequently asked questions
Can I get an extension to file my GST return?
No. IRD says you cannot get an extension of time to file a GST return, so file by the due date even if you cannot pay in full. Then contact IRD about payment.
Do I still file if I can’t pay?
Yes. IRD requires a return for every taxable period, including nil returns. Filing on time and talking to IRD early generally leaves you in a better position than missing both.
Will IRD let me pay GST in instalments?
You can apply for an instalment arrangement, and IRD may ask for financial information first. It is relief rather than a method of payment, and interest and penalties can continue while a balance is outstanding.
Can late payment penalties be removed?
IRD says it might be able to write off penalties or certain amounts if you cannot meet your payments. It isn’t guaranteed, so ask rather than assume.
Could a business loan pay my GST bill?
Sometimes, where the borrowing has a genuine business purpose, the gap is temporary and suitable New Zealand property can be offered as security. Approval depends on the full assessment, and the cost and risks should be weighed against an IRD arrangement first.