Managing financial difficulty and debt: If you are having difficulties meeting your obligations
The best way to make your tax payments is to plan ahead for them so you can pay the full amount on time. See our calendars and important dates to help with your planning.
There are a range of options available for paying amounts due. If you are unable to pay the full amount due on time, you should contact us as soon as possible. You do not have to wait until the due date for payment has passed.
We will discuss your current circumstances and help you determine the best option for dealing with the amount due. We will look at your current situation, your payment history and your ability to meet future obligations. When looking at your individual case we will follow established guidelines.
Options for payment are:
- Payment in full
- An instalment arrangement where you repay an agreed amount over time. See our "Instalment arrangement proposal" service under "Get it done online"
- Writing off an agreed amount if we determine that full payment would cause you serious hardship
- A combination of an instalment arrangement and a serious hardship write-off.
We may need further information from you to determine the best options for you.
Student loan borrowers
From 7 February 2013, you won't be able to borrow through the Student Loan Scheme if you have $500 or more in default at the time of your application, and even some portion of the amount has been overdue for a year or more. This applies to all new student loan applications received on or after 7 February 2013 and includes all unpaid repayment obligations, late payment interest, penalties, and amounts under instalment arrangement, regardless of whether you've had a loan before.
If you think you can't pay by the due date
Contact us before the due date to let us know about your financial difficulties. Penalties and interest apply to tax bills that are unpaid by the due date but, if your financial situation prevents you from paying on time, we may for example set up an arrangement where you pay the amount owing in instalments. If you contact us and make a formal arrangement before the due date, as long as you meet all of your obligations under the arrangement you will only be charged one late payment penalty of 1%. No further penalties will be charged. If this is your first late payment in a two-year period, you will not use your grace period.
Note that even with an arrangement you are still charged interest on the tax owing. So you may wish to consider borrowing money from elsewhere so that you can pay the tax bill by the due date.
If the due date has passed and you have an unpaid tax bill
If you make an arrangement after the due date, any penalties already charged will stand. If you meet all of your obligations under the arrangement, no further penalties will be charged. However, use-of-money interest continues to be charged.
In some instances when you contact us to discuss your payment options, we may need further information from you to determine the best option for you. This may require you to phone us back, complete a form or file a return. You will be given a specific timeframe to provide the information that we need. During this time, we will not impose further late payment penalties or take new debt recovery actions. Late payment penalties and recovery actions will recommence only if a conclusion is not reached before the end of the negotiated timeframe. The use-of-money interest continues to be charged during the period of negotiation.
For more information please refer to our Debt options information sheet (IR592) or part 6 of our Debt options booklet (IR582).
To discuss payment options, please contact us at Inland Revenue on freephone 0800 227 771 or, if you are in business or have a student loan, on freephone 0800 377 771.
Child support customers
The best way to avoid debt is to pay the full amount you owe, on time, every month. But if you get behind in your payments or think you are going to have trouble paying on time, phone us on 0800 221 221.
We will talk to you about ways to pay off your debt. The quickest way to clear the debt is to pay the total amount in one sum. Other options are to pay a partial amount of the total, or to pay off the debt over time by entering into an arrangement with us. We will help you to work out what's possible for you.
We can write off paying parents' penalties in some situations but cannot write off unpaid assessed amounts.
Custodians who have a debt to pay should call us on 0800 221 221 to discuss their situation. We may be able to write off custodians' debt in some cases.
Date published: 06 Jun 2012
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