Behind with Inland Revenue? The fast ways to deal with IRD debt, ranked

How serious is IRD debt in 2026?

Serious enough to deal with this week. In January 2026, Inland Revenue published an update describing a targeted campaign on overdue GST and employer debt. The process is straightforward: Inland Revenue contacts the business to arrange payment or an instalment plan, follows up, then makes a final attempt. If there’s still no response, the next steps can include a visit, a bank deduction (where Inland Revenue takes money directly from your bank account) and other enforcement, which may include bankruptcy or liquidation consideration.

On top of that, penalties accumulate. Inland Revenue charges a late payment penalty of 1% the day after the due date and a further 4% on the seventh day after, plus interest. For employment-related debt, separate non-payment penalties apply.

The good news: every option on this page is easier before enforcement starts.

What are the fast options, ranked?

Rank	Option	When it fits	Watch out for
1	Pay from cash reserves	You have the money but it’s committed elsewhere	Don’t strip working capital to zero
2	Instalment arrangement (myIR)	Debt is manageable, you can afford steady payments	Interest continues; must keep new obligations current
3	Property-secured loan	Debt is large, enforcement is close, or you want IRD cleared	Property at risk; plan the exit
4	Caveat-style loan	Enforcement is days away and a mortgage can’t be ready	Higher cost, very short term
5	Unsecured loan	Smaller debts, strong bank statements	Tax debt can limit unsecured offers
—	Several short unsecured loans	Almost never	Loan stacking; repayments overwhelm cash flow

For a deeper look at rank 2 versus rank 3, read IRD instalment arrangement vs loan.

How does an instalment arrangement work?

You apply in myIR under “Request an instalment arrangement”. Inland Revenue asks you to confirm what you can afford, choose a payment method and frequency (weekly, fortnightly or monthly) and a start date. Interest on the overdue amount continues and is included in your instalments. Inland Revenue describes an arrangement as “a method of financial relief”, not a method of payment — in other words, it’s support, and it depends on you keeping to it.

Two conditions matter in practice: keep up every instalment, and stay current on new returns and payments. Falling behind on either can put the arrangement at risk.

When is a loan the better move?

• Enforcement is imminent. A bank deduction would hit operating cash at the worst moment.
• IRD won’t accept an affordable arrangement, because the instalments would stretch too long.
• You need a clean IRD position to refinance, sell, tender or reassure a key supplier.
• You have property equity, which makes a larger, more flexible loan possible.

Illustrative example. A Rotorua hospitality business owes $140,000 across GST and PAYE after a slow winter. Inland Revenue has called twice. The owners own their home with a modest mortgage. A second mortgage clears the debt within days and stops escalation; the repayment plan relies on summer trading and a refinance to their bank once two clean quarters are on record. They also switch to monthly GST filing to keep obligations smaller and more frequent.

Not sure which rank you’re at? Get a straight answer on IRD debt — no credit check to ask.

What should you do in the next 48 hours?

1. Log in to myIR and download the current balance by tax type.
2. Read every letter from Inland Revenue and note any deadlines.
3. Call or message Inland Revenue to tell them you’re arranging payment — it shows engagement.
4. Work out what you can afford each week without starving the business.
5. Gather documents: bank statements, ID, property details if relevant.
6. Talk to your accountant about whether an arrangement, a loan or a mix is best.

How do you stop it happening again?

• Set aside GST and PAYE as you go. A separate account for tax money, topped up every time customers pay, is the single most effective habit.
• Know your dates. Small employers pay PAYE by the 20th of the following month. Provisional tax instalments for March balance dates under the standard option are due on 28 August, 15 January and 7 May. Our provisional tax dates guide sets out the 2026–27 calendar.
• Forecast. A simple monthly cash flow forecast shows tax bills coming months ahead.
• Consider a standby facility. A line of credit arranged in a calm month can cover a tax date without a scramble.

What do lenders think about IRD debt?

Lenders look closely at tax debt because Inland Revenue can take priority in some circumstances and because it signals cash-flow stress. That doesn’t rule you out. What lenders want to see:

• the full, accurate amount owed;
• whether there’s an arrangement and whether it’s been kept up;
• what caused the debt and what’s changed;
• how the business will stay current going forward; and
• what security is available.

Bad credit and IRD debt are considered case by case — see bad credit business loans for how lenders weigh both together. If time is extremely short, caveat vs second mortgage explains the fastest property-backed route.

Deal with it before IRD’s next step

Owing Inland Revenue is stressful, but it’s very common and very fixable when you move early. Asking us what’s possible doesn’t involve a credit check, and your situation goes to one specialist — not to a crowd of lenders. Please give us the exact amount owed, any enforcement notices and accurate property details; with that, we can tell you on the first call whether an arrangement, a loan or a combination makes the most sense. Start your application.