What the pilot actually lets you do
As of 1 April 2026, if you're eligible, you can enter a payment arrangement with Tax Traders, a registered, IR-approved tax pooling provider, to deal with 2023 and/or 2024 income tax debt. You then have up to 14 months to pay.
Here's the plain English version of how it works.
Tax Traders holds a pool of tax that other taxpayers have already paid to IR, with each payment stamped with the date it was originally paid into the pool.
You’d essentially be buying the amount of tax you owe out of that pool.
Because your purchase carries an original payment date that lines up with your due date, IR treats your tax as if you paid it on time, back on that original date. The late payment penalties disappear from your account, and the interest that's been building at IR's rate stops.
You still pay the tax you owe in full – you just get there in a way that doesn't cost you what IR would otherwise charge and with the flexibility to tailor a payment arrangement that suits your business cash flow.
Legislative deadlines
- Set up your Tax Traders payment arrangement by 1 October 2026. This is the date you must enter into a payment plan with Tax Traders for the 2022-23 and/or 2023-24 income year as part of the debt-recovery pilot programme.
- Settle your payment arrangement with Tax Traders by 1 October 2027. This is the date by which any payment plan entered into under the debt-recovery pilot programme must be fully settled with Tax Traders and transferred to Inland Revenue.
Eligibility criteria
- The debt must relate to the 2022–23 and/or 2023–24 income years and must be provisional tax (excluding AIM), terminal tax or associated interest.
- All income tax and GST returns, and employment income information must be filed.
- There must be no overdue GST or employment‑related tax.
- You must not be bankrupt or liquidated, not be subject to Inland Revenue legal recovery proceedings for unpaid tax, and not be presumed unable to pay your debts in the previous 12 months.
- In limited circumstances, Inland Revenue may waive some of these criteria where the Commissioner has accepted a request for financial relief.
How much tax pooling could save you
Entering a payment arrangement with Tax Traders and paying the overdue income tax will:
- Eliminate the late payment penalties.
- Pay an interest cost that is typically well below what IR would otherwise charge for overdue tax.
Based on a Tax Traders quote, settling this debt in the example above through tax pooling instead of paying IR directly on 1 October 2026 would cost $12,156 – against the $13,007 it would cost with IR.
That's a saving of $851* in interest and penalties.
*Figures above are indicative only, based on IR's published UOMI rates as at 21 July 2026 and a due date of 7 April 2024. Your actual savings will depend on your tax owing, due date and when you plan to pay your arrangement with Tax Traders
About Tax Traders
Tax Traders is an Inland Revenue‑approved tax pooling provider. We help taxpayers manage provisional and terminal tax by reducing exposure to Inland Revenue interest and late payment penalties, while ensuring tax is paid in accordance with New Zealand tax law.
Tax pooling is a legislated framework that allows taxpayers to effectively backdate tax payments through the tax pool. This can be particularly useful where tax has been paid late, paid on the wrong date or where historic income tax liabilities have arisen.
Tax pooling has been operating in New Zealand for more than two decades.
Inland Revenue's debt‑recovery pilot programme expands how tax pooling can be used for eligible taxpayers with historic income tax debt, providing a clear, legislated pathway to address older tax periods.
