If you or your business currently has outstanding income tax from the 2023 or 2024 tax years, there is an important new development you should know about.
The Government has announced a major change to how tax pooling can be used, and it could make resolving your tax debt faster, cheaper, and far less stressful.
What’s changing?
Until now, tax pooling has mainly been used to manage provisional tax — helping taxpayers smooth cashflow, reduce risk, and avoid unnecessary interest.
But for the first time, the Government is allowing tax pooling to be used to settle overdue income tax debt, not just provisional tax shortfalls. This includes tax owing for the 2023 and 2024 income years.
A formal trial of this expanded access begins at the end of this month and will run until 30 September 2027.
Why this matters to you
If you’ve missed a payment or have an outstanding tax bill, this initiative could:
• Reduce or eliminate IRD Use of Money Interest (UOMI)
• Lower or prevent late payment penalties
• Provide more flexible options to tidy up older tax years
• Help you avoid entering (or breaching) IRD payment plans
• Reduce stress and financial pressure on your business or household
In short, it creates a new pathway for getting back on track — but only if you take action.
Who can benefit?
You may benefit from this new initiative if you:
• Have unpaid income tax from the 2023 or 2024 tax years
• Missed a 7 February terminal tax deadline
• Are struggling with current payment arrangements
• Want to reduce interest and penalties before they snowball
• Anticipate difficulty paying upcoming tax obligations
Even if you’re unsure whether you qualify, it’s worth checking — the savings can be significant.
We can help you navigate the new rules
As your tax adviser, we can:
• Assess whether your tax debt qualifies for the trial
• Estimate the potential interest savings
• Manage the tax pooling process through an approved intermediary
• Work directly with IRD where needed
• Help you plan ahead to avoid tax stress in future years
If you have any tax debt — now is the time to talk to us
This is a rare opportunity to clean up past tax years with less cost and less pressure.
Get in touch with us as soon as possible if you think you may have outstanding income tax or upcoming payments you’re worried about.
About Pathfinder Solutions
Pathfinder Solutions advisory team members have either owned or managed businesses, or are investors themselves, so we know first-hand the challenges you face in your world.
Sure we’re Accountants, but the best solutions in business come from focusing on more than just the numbers. Our real-world business experience delivers just that.
