IRD Debt Negotiation
NZ Businesses
Trust
IRD debt negotiation NZ businesses can rely on. We prepare the payment proposal, financial disclosure and section 177C compromise application your business needs to negotiate with IRD. You lodge through myIR. Fixed fee, no hourly billing, no commission.
Margate Group is a business consultancy, not a law firm or tax agent. We prepare documentation and strategy. You lodge with IRD through your own myIR account.
Talk to us about your IRD debt
No obligation. No hourly clock. We'll tell you which pathway fits and what the proposal needs to look like.
Documentation and Strategy
For Your IRD Negotiation
Margate Group prepares the proposal, supporting financials and strategy. You lodge it with IRD with proper documentation behind you, not a phone call and a hope.
What's included
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01
Financial position review
Full review of business and personal cashflow, assets, liabilities and recent tax history to determine the strongest negotiation path.
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02
Strategy recommendation
Written recommendation on which IRD pathway fits: instalment arrangement, penalty and interest remission, or debt compromise under section 177C of the Tax Administration Act 1994.
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03
Proposal drafting
Drafting of the formal payment proposal or compromise application with supporting financial schedules in IRD's expected format.
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04
Hardship documentation
Preparation of serious hardship documentation under sections 176 and 177 of the Tax Administration Act 1994.
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05
Submission coaching
Walk-through of how to lodge the proposal with IRD through myIR or in writing, and how to respond to follow-up questions.
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06
Outcome review
Review of IRD's response and recommendation on next steps if the proposal needs revising or escalating.
Margate Group does not communicate directly with IRD on your behalf. We prepare the documentation and strategy. You lodge with IRD using your own myIR account or in writing.
How we approach IRD debt
Every proposal starts with a realistic cashflow forecast. IRD rejects proposals that don't show how repayments will actually be funded.
We prepare complete financial disclosure. Partial disclosure is the fastest way to have a proposal declined and damage future negotiations.
We recommend the pathway that fits the actual situation, even if that means a harder conversation. A debt compromise isn't always the right call.
Unpaid PAYE and GST can attach personal liability to directors. We flag exposure before it becomes a personal problem.
Use-of-money interest accrues daily. We turn proposals around fast so the debt isn't growing while paperwork sits on a desk.
You'll know exactly what we're proposing and why. No tax jargon, no surprises when IRD responds.
If Any of This Sounds Familiar
IRD tax debt rarely arrives suddenly. It builds. These are the signs it's time to act before use-of-money interest, penalties or enforcement make things worse.
Common situations we see
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GST or PAYE arrears piling up Returns filed but unpaid. Use-of-money interest accruing daily under section 120D of the Tax Administration Act.
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Provisional tax overshoot Year-end square-up larger than expected. Now sitting on a debt that wasn't budgeted for.
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Instalment arrangement broken Missed payments on an existing arrangement. IRD can cancel and demand the full balance.
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IRD letter or demand received Final notice, statement of liability or recovery action warning. The clock is now running.
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Deduction notice threatened IRD can issue a deduction notice to your bank or customers under section 157 of the Tax Administration Act.
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Director liability exposure Unpaid PAYE can attach personal liability to directors. Personal assets at risk, not just the company.
Earlier is better. IRD treats proactive proposals more favourably than reactive ones. Once enforcement action starts, options narrow fast.
Rates current at time of publication. Verify the current use-of-money interest rate on ird.govt.nz.
Four Steps from Stuck to Resolved
A clear sequence. Fixed fee. No hourly billing and no surprises.
Free Consultation
30 minutes by phone or video. We discuss your tax debt position, what IRD has already said, and the realistic options.
Financial Review
You supply cashflow, assets and liabilities. We compile the financial disclosure IRD expects to see with a proposal.
Proposal Drafted
We draft the formal proposal: instalment arrangement, penalty remission or section 177C debt compromise, with supporting schedules.
You Lodge with IRD
Submit through myIR or in writing. We support you through IRD's response, follow-up questions and any revisions.
Ready to start?
Free 30 minute consultation. No obligation. No hourly billing.
Is This Right For You?
IRD debt negotiation isn't right for everyone. Here's an honest view of when our service helps and when something else fits better.
- Your business owes IRD between $10,000 and $500,000+ in GST, PAYE, income tax or provisional tax
- You can fund some level of repayment from cashflow, asset sale or refinance
- Your returns are filed or you can file them as part of the process
- You want a structured plan rather than ad hoc calls to IRD
- You're prepared to give full financial disclosure to IRD as part of the proposal
- You want to keep trading through and beyond the arrangement
- You're insolvent and cannot trade out — liquidation or voluntary administration is the path, not negotiation
- The debt is disputed — that's a tax dispute, not a debt negotiation
- You haven't filed returns for years — a chartered accountant needs to bring filings current first
- You need legal representation in court — that's a tax lawyer, not a consultancy
- You want someone to phone IRD on your behalf — we prepare documentation, you lodge it
We prepare commercial documentation and strategy. We do not provide tax advice reserved for chartered accountants, we do not represent clients in tax disputes or court, and we do not communicate with IRD on your behalf. You lodge proposals using your own myIR account.
Trusted by Businesses Across New Zealand
We can't recommend The Margate Group highly enough. During our business's start up phase, Margate provided invaluable, clear, and precise advice on agreements and structure. They have a unique ability to explain complex legal jargon in plain terms.
As a SME owner, getting the right advice isn't always easy. Margate strike the perfect balance of professional, direct and genuinely caring. From contract negotiations to tricky customer non-payment disputes, they've consistently helped me achieve the right outcome.
Margate Group has helped us with numerous shareholder agreements and company sales and purchase agreements. Outstanding advice, quick turn around and at a reasonable cost. Highly recommend.
How IRD debt negotiation actually works in New Zealand
Inland Revenue is the largest unsecured creditor most New Zealand businesses will ever face. It also has the most options for working with you, if you approach it correctly. The difference between a successful tax debt negotiation and a failed one usually comes down to preparation, not luck.
Can you actually negotiate tax debt with IRD?
Yes. The Tax Administration Act 1994 gives Inland Revenue specific powers to vary how a tax debt is collected. Three pathways do most of the work for businesses: instalment arrangements under section 177B, penalty and interest remission, and debt compromise under section 177C. Each has different criteria and different evidence requirements.
Section 6A of the Act sets the underlying duty: the Commissioner must collect the highest net revenue over time, having regard to the resources available, taxpayer compliance costs, and the importance of voluntary compliance. That duty is why IRD will often accept a structured proposal that pays less now but more reliably than aggressive enforcement that pushes a business into liquidation.
IRD is not negotiating against you. It's choosing between collection paths. A well-prepared proposal makes the right path obvious.
What are the formal options?
Instalment arrangement (section 177B). Pay the debt over time, usually 12 to 24 months. Use-of-money interest continues to accrue. This is the most common outcome and the easiest to negotiate.
Penalty and interest remission. Reduce or remove late payment penalties and use-of-money interest where there's a reasonable basis. Requires evidence of cause and remediation.
Debt compromise (section 177C). Settle the debt for less than the full amount. Strict criteria. IRD must be satisfied the compromise maximises net recovery compared to other options.
Serious hardship relief (section 176). Write-off where recovery would cause serious hardship. Defined by ability to pay, not by preference.
Why do proposals fail?
Most rejected proposals fail for the same reasons: incomplete financial disclosure, unrealistic repayment terms, current obligations not being kept up to date, or proposing a compromise when an instalment arrangement was the right tool. IRD reads dozens of these a week. A proposal that doesn't show its working gets declined.
What does a strong proposal look like?
A proposal IRD takes seriously contains a clear statement of the debt and how it arose, a full financial disclosure including assets, liabilities, income and expenses, a cashflow forecast showing how repayments will be funded, the proposed terms in specific dollars and dates, and evidence that current obligations are being met or will be brought current. Anything less invites delay or rejection.
Unpaid PAYE and certain GST shortfalls can attach personal liability to directors under the Tax Administration Act and the Companies Act 1993. Resolving company tax debt without addressing director exposure leaves you exposed even after the company is settled.
What happens after you lodge?
IRD acknowledges receipt within roughly 5 to 10 working days. Assessment of the proposal against section 6A and the relevant provisions usually takes 4 to 12 weeks depending on complexity. IRD may request further information. A decision is then issued: acceptance, decline, or counter-terms.
Once accepted, the arrangement is binding under the Tax Administration Act. Missing a payment, or failing to keep current obligations filed and paid, allows IRD to cancel the arrangement and demand the full balance, often with reinstated penalties.
When is liquidation the better answer?
Not every IRD debt should be negotiated. If the business is insolvent, cannot trade out, and a proposal would only delay an inevitable outcome, voluntary liquidation may be a better path for the directors than a failed arrangement. We say so when we see it.
If you'd like a clear view of which IRD debt negotiation pathway fits your situation, our 30 minute consultation is free. We'll tell you honestly whether negotiation is the right move, or whether something else is.
Can IRD debt negotiation NZ actually work?
Yes. IRD debt negotiation NZ businesses pursue runs under the Tax Administration Act 1994, which gives Inland Revenue specific powers to vary how a tax debt is collected. Three pathways do most of the work: instalment arrangements under section 177B, penalty and interest remission, and debt compromise under section 177C. Each has its own criteria.
How much does IRD debt negotiation cost with Margate Group?
Fixed fee $1,995 + GST. No hourly billing, no commission, no surprise add-ons. The first 30 minute consultation is free.
How much would a tax lawyer or chartered accountant charge for the same work?
Tax lawyers in New Zealand typically charge $350 to $700 per hour and an IRD negotiation can run 8 to 20+ hours, putting total cost in the $3,000 to $14,000 range. Chartered accountants offering similar work usually charge $200 to $400 per hour. Margate Group is fixed fee at $1,995 + GST regardless of how long it takes.
How is IRD debt negotiation different from a tax dispute?
A tax dispute is about whether the tax is correctly assessed. An IRD debt negotiation accepts the assessment is correct and proposes a way to pay it. Disputes follow a separate statutory process and require a tax lawyer or registered tax agent. We handle negotiations, not disputes.
How long does it take to resolve IRD tax debt?
Instalment arrangements are typically agreed within 4 to 6 weeks. Penalty remission and debt compromise applications usually take 8 to 12 weeks depending on case complexity and how quickly IRD reviews the submission.
Does Margate Group talk to IRD on my behalf?
No. We prepare the proposal, supporting financial disclosure and strategy. You lodge it with IRD through your own myIR account or in writing. This keeps you in control of your taxpayer relationship and keeps our fees fixed.
What is a section 177C debt compromise?
A debt compromise under section 177C of the Tax Administration Act 1994 settles a tax debt for less than the full amount. IRD must be satisfied the compromise maximises net recovery compared to enforcement. Strict financial disclosure and evidence requirements apply.
What happens to use-of-money interest during an arrangement?
Use-of-money interest continues to accrue on the unpaid balance during a standard instalment arrangement at the current IRD rate of around 10.39% annually. Interest can be reduced or remitted as a separate application where there is a reasonable basis.
Am I personally liable for my company's IRD debt?
Unpaid PAYE and certain GST shortfalls can attach personal liability to directors under the Tax Administration Act 1994 and the Companies Act 1993. We flag director liability exposure in every engagement so it can be addressed alongside the company debt.
What if IRD declines my proposal?
A decline usually comes with reasons. Most declined proposals can be revised and resubmitted with stronger financial disclosure, more realistic terms, or a different pathway. We review IRD's response and recommend the next step as part of our fixed fee.
Is Margate Group a law firm or tax agent?
No. Margate Group is a business consultancy. We prepare commercial documentation and strategy. We are not a law firm and we are not a registered tax agent. You lodge proposals with IRD using your own myIR account.
What if I can't afford to pay anything?
Section 176 of the Tax Administration Act allows IRD to write off tax where recovery would cause serious hardship. We assess whether hardship relief is the right pathway and prepare the supporting documentation if so.
Stop the interest clock.
Start the proposal.
Every day of inaction adds use-of-money interest at around 10.39% annually plus monthly penalties. A proper proposal stops the spiral.
- Fixed fee $1,995 + GST
- Section 177B, 177C and 176 pathways covered
- 4 to 6 week typical turnaround
- Nationwide NZ, remote service
- 5.0 on Google
Talk to us about your IRD debt
No obligation. No hourly clock. Honest view of your options.
Book Free ConsultationMargate Group is a business consultancy, not a law firm or tax agent. We prepare documentation and strategy. You lodge with IRD through your own myIR account.