How can Inland Revenue's debt-pilot programme help clients with 2023 and 2024 income tax debt?

 Logan Jessop, Client Solutions Expert 

• Eligible taxpayers with 2023 and/or 2024 income tax debt may be able to use Inland Revenue's debt pilot programme to settle historic liabilities through tax pooling.

• Taxpayers must meet Inland Revenue's eligibility criteria and enter a payment arrangement by 1 October 2026, with repayment completed by 1 October 2027.

• The debt pilot programme gives accountants another option to discuss with clients carrying 2023 and 2024 income tax arrears, helping them resolve historic debt more cost-effectively. 
  
  

The debt-pilot programme allows eligible taxpayers to use tax pooling to settle historic 2023 and 2024 income tax liabilities that would otherwise sit outside the normal legislative tax pooling rules.

The aim is simple: help Inland Revenue (IR) recover outstanding debt while providing taxpayers with a practical and potentially more cost-effective pathway to bring their tax affairs up to date.

To qualify for the programme, your clients must meet all the eligibility criteria below:

• The debt must be for provisional tax (excluding AIM), terminal tax or associated interest for the 2023 and/or 2024 tax year.
• All income tax and GST returns, and employment income information must be filed.
• There must be no overdue GST or employment-related tax.
• The taxpayer must not be bankrupt or liquidated, not be subject to IR legal recovery proceedings for unpaid tax and not be presumed unable to pay their debts in the previous 12 months.

In limited circumstances, IR may waive some of these criteria where the Commissioner has accepted a request for financial relief.

Eligible taxpayers have until 1 October 2026 to enter a payment arrangement with Tax Traders as part of the programme. They would then have until 1 October 2027 to satisfy that payment arrangement.

Tax Traders has streamlined the process so debt-pilot programme transactions can be entered online. This allows you to quickly estimate potential savings and confirm whether clients meet the eligibility criteria.

Want to know which of your clients may be eligible?

If your firm has an IR data feed connection enabled with Tax Traders, we can provide a report highlighting clients with 2023 and/or 2024 income tax shortfalls who may be eligible for the pilot programme.

This can help you identify opportunities, prioritise client conversations and take action before the 1 October 2026 deadline.

If your firm does not have an IR data feed connection enabled, this can be set up via the Tax Traders portal.

Feel free to contact our team if you have any questions on the debt-pilot programme or enabling your firm’s IR data feed.