Opening a letter from Inland Revenue can feel alarming. An overdue-tax notice is a reason to act promptly, but the first move is not to guess at the worst outcome—or to take the first loan offered. Identify the exact notice, the tax period and the deadline. The right response depends on what Inland Revenue has actually asked you to do.
What should I do today?
- Check that the notice is genuine. Sign in to myIR directly rather than following an unexpected email or text link. Match the notice to your business account, tax type, period and amount. If anything looks wrong, contact Inland Revenue through its published channels.
- Write down every date. A reminder, an intention-to-disclose notice and a formal legal document may call for different responses. Keep the envelope, attachments and any myIR messages.
- Check whether returns are missing. Inland Revenue says overdue returns should be filed as soon as possible. A payment conversation cannot replace getting the underlying tax position right.
- Talk to your accountant or tax adviser. Ask for a current tax balance, a short cash forecast and an explanation of whether the sum or period is disputed.
- Contact Inland Revenue early. Its official debt guidance says an instalment arrangement or financial relief may be available, depending on the circumstances. Do not assume an application has been accepted until Inland Revenue confirms it.
If the notice mentions court action, liquidation, a statutory demand, enforcement or a deadline you cannot meet, obtain New Zealand legal or insolvency advice immediately. A general article cannot calculate your particular time limit.
What if I cannot pay the whole amount?
An IRD instalment arrangement may allow payments over time. Inland Revenue warns that simply making regular voluntary payments is not necessarily the same as having an agreed arrangement; penalties and interest can differ. A company, partnership or trust may also consider financial relief through myIR. Inland Revenue may ask about assets, liabilities, why the debt arose and whether finance has been explored.
Those are official avenues, not guaranteed outcomes. A good plan also covers the next GST, PAYE or income-tax obligation and normal operating costs. If you clear an old tax balance only to fall behind again next month, you have not solved the cash-flow problem.
What information will help me decide?
Prepare one page with the amount owing, tax type, periods, due dates, any disputed items, other urgent creditors, cash expected in the next 13 weeks and the steps already taken. Add a realistic view of what the business can pay without starving payroll, rent, suppliers or future tax.
Compare the practical options: an IRD arrangement, accountant-led negotiation, additional owner funds, selling a non-essential asset, a refinance or business-purpose borrowing. The appropriate mix depends on the cause of the arrears and whether the business remains viable. Our broader IRD tax-debt options guide explains these pathways in more detail.
Could a property-backed business loan help?
Possibly. HomeSec considers genuine business-purpose applications from $20,000 to $1,000,000 where suitable New Zealand real estate can be offered as security. Past credit issues or tax arrears do not automatically rule out a discussion; we look at the whole scenario, including property equity, existing mortgages, timing and how the loan will ultimately be repaid. We do not promise approval or ignore the underlying difficulty.
Where an approved facility permits it, a structure with up to six months with no scheduled payments may provide breathing space. That does not mean interest and fees vanish; they may accrue and increase the amount owing. Funding in as little as 24 hours can be possible for an eligible, complete case, but it is not a deadline guarantee. Legal work, security and settlement still have to align.
This is an option to compare—not an instruction to borrow. Property security creates a real risk if obligations cannot be met. Ask for the full cost, repayment and exit terms and take independent advice before committing.
A reassuring next step
You do not need a perfect history to ask a question. Start with the notice, the amount needed, the business purpose and the property that may be available. We can tell you whether a HomeSec conversation is worthwhile while you continue with Inland Revenue and your adviser. Let’s see if we can help you find a workable path.