How Tax Traders can assist with reassessments

08 October 2025

Inland Revenue has increased audit and compliance activity across New Zealand, resulting in more taxpayers being reassessed. Tax pooling, via Tax Traders, is now a key tool for managing audit risk.
Tax Traders allows clients to reduce interest costs and avoid late payment penalties by purchasing backdated tax through the approved tax pooling framework, provided certain criteria are met.
Clients have 60 days from a reassessment notice to use Tax Traders’ services, which can lead to significant savings for a wide range of tax types, including income tax, GST and PAYE.

Inland Revenue (IR) has ramped up its investigation activity across New Zealand, with Tax Traders seeing a noticeable uptick in audits and compliance reviews targeting taxpayers of all sizes.

In fact, data released under the Official Information Act shows the following for the year ended 30 June 2025:

IR opened 6,174 audits – a 20% increase on the same period 12 months prior.
The number of active audit investigations was 27% higher, up from 3,773 in 2024 to 4,794 this year.
Audit closures are accelerating, with the number of closed cases (7,641) rising by 76% compared to 2024.
There were 28,533 voluntary disclosures made by taxpayers, a slight increase from the previous year.

Against this backdrop, tax pooling is emerging as a powerful tool for mitigating your clients’ risk if they find themselves under the microscope of IR.

How can Tax Traders assist?

Tax Traders can reduce your clients’ interest exposure if they receive a notice of reassessment from Inland Revenue following a voluntary disclosure or audit.

We utilise the IR-approved tax pooling framework to allow your client to purchase backdated tax from another taxpayer who has overpaid and apply this against their liability. IR recognises that your client paid their tax on time once this transaction is completed, eliminating use-of-money interest (UOMI) and, if applicable, late payment penalties.

What criteria must your clients meet?

For your client to use Tax Traders in an audit or voluntary disclosure situation:

A return for the tax type and period for which your client is being reassessed must have been previously filed, unless Commissioner’s discretion has been granted.

Only the difference between the original and reassessed amount can be purchased.

Your client has 60 days from the date a notice of reassessment is issued by IR to buy the additional tax they require from Tax Traders and have this transferred to IR on their behalf.

What tax types can Tax Traders assist with?

If your client satisfies these criteria, then Tax Traders can assist with:

Income tax

Withholding taxes (RWT, NRWT)

Employment-related taxes (PAYE, FBT, ESCT, RSCT)

Further income tax

Imputation penalty tax.

Comparison: Tax Traders vs. IR

	Tax Traders	IR direct payment
IR compliant	Yes – IR introduced tax pooling framework more than 20 years ago	Yes
Lower interest cost	Yes – significantly reduced	No – subject to high UOMI
Backdated payment capability	Yes	No
Cash flow flexibility	Yes – option to make a single payment or pay in instalments (so long as liability is satisfied within the legislative deadline)	Payment required on IR due date, which may strain cash flow
Late payment penalties (if applicable)	No – these are eliminated	Penalties may apply on top of UOMI

Why Tax Traders

At Tax Traders, we have the best technical knowledge in the market, with expertise across accounting, tax law, banking and tax pooling. Our strong relationships with IR officials ensure that we can help you navigate the complexities of audits and reassessments effectively.

We make sure that your client settles their obligations in the most effective manner, and we use our proprietary software Defender to ensure that we get it right first time, every time.

Our comprehensive tax inventory base, which includes tax dating back to November 2011, is complemented by access to the corporate supply market, ensuring that we can meet all your tax needs efficiently and effectively.

If you have any questions or want to know more, please reach out to the Tax Traders team.

Disclaimer: The information in this article is Tax Traders’ general view, intended to provide enough information to inform you about this topic generally as at the date of the article, rather than comprehensive information for all situations. This article should not be relied upon to make decisions. Tax Traders recommends you seek professional advice as appropriate for your circumstances.