Last updated: January 2026
How to apply for an IRD debt instalment plan is a common question for New Zealand taxpayers who are unable to pay outstanding tax in full and need a structured repayment arrangement with Inland Revenue.
If you are struggling to pay outstanding tax in New Zealand, an IRD debt instalment plan can help you manage your obligations without facing immediate enforcement action. Understanding how the process works — and what Inland Revenue expects — can significantly improve your chances of approval.
An IRD debt instalment plan is a formal payment arrangement with Inland Revenue that allows New Zealand taxpayers to repay overdue tax in scheduled instalments over time, helping manage cashflow while remaining compliant.What Is an IRD Debt Instalment Plan?
An IRD debt instalment plan is an agreement between a taxpayer and Inland Revenue that spreads unpaid tax over a manageable repayment schedule. It is commonly used by businesses and individuals facing temporary financial difficulty.
Inland Revenue provides formal guidance on managing tax debt and payment arrangements through its official website. For more information, refer to the Inland Revenue debt and insolvency guidance .
Taxpayers can submit instalment plan requests directly through Inland Revenue’s systems, including myIR. Official information is available on the Inland Revenue website .
Once approved, IRD expects payments to be made on time and in full. Missing instalments can result in penalties, interest, or cancellation of the arrangement.
Who Can Apply for an IRD Debt Instalment Plan?
You may be eligible to apply for an instalment plan if:
- You have existing tax arrears with IRD
- You are unable to pay the full amount immediately
- You can demonstrate financial hardship or cashflow pressure
- You are willing to meet ongoing tax obligations
Eligibility depends on your financial position, compliance history, and ability to sustain repayments.
Step-by-Step: How to Apply for an IRD Debt Instalment Plan
1. Review Your Tax Debt
Confirm the total amount owing, including tax, penalties, and interest. Understanding the full liability is essential before proposing a repayment plan.
2. Assess Your Financial Position
Prepare a realistic assessment of your income, expenses, and cashflow. IRD will evaluate whether your proposed instalments are sustainable.
3. Gather Supporting Documents
Common documents include bank statements, financial statements, cashflow forecasts, and details of personal or business expenses.
4. Submit the Application to IRD
Applications can be made through myIR or directly with IRD. You will need to propose a repayment amount and schedule.
5. Respond to IRD Requests
IRD may request further information before approving the arrangement. Prompt and accurate responses help avoid delays.
6. Maintain Ongoing Compliance
Once approved, you must meet instalment deadlines and stay current with future tax obligations.
Documents Required for an IRD Debt Instalment Plan
- Tax statements and notices from IRD
- Recent bank statements
- Financial statements (for businesses)
- Cashflow forecasts
- Details of personal or business expenses
Common Mistakes to Avoid
- Proposing unrealistic repayment amounts
- Missing response deadlines from IRD
- Failing to disclose full financial information
- Ignoring ongoing tax obligations
These mistakes can result in rejected applications or cancelled arrangements.
How an Accountant Can Help with an IRD Instalment Plan
Engaging an experienced accountant can help ensure IRD debt instalment plans are approached correctly. Professional advisors assess eligibility, prepare supporting documentation, and represent taxpayers during discussions with Inland Revenue.
DFK ORB360 provides specialist accounting support for IRD debt instalment plans, helping businesses and individuals structure practical repayment arrangements while maintaining ongoing tax compliance.
What Happens After an IRD Debt Instalment Plan Is Approved?
Once an IRD debt instalment plan is approved, taxpayers are required to follow the agreed repayment schedule strictly. Payments must be made on time, and all future tax obligations must also be met as they fall due.
IRD may periodically review the arrangement, especially if payments are missed or if your financial situation changes. If circumstances improve, IRD may expect higher repayments, while genuine hardship may allow for renegotiation. Staying proactive and communicating early with Inland Revenue is critical to keeping the arrangement in place.
Frequently Asked Questions
How long does IRD take to approve an instalment plan?
Approval timelines vary. Some applications are processed within days, while others may take several weeks if additional information is required.
Can IRD refuse a debt instalment plan?
Yes. IRD may refuse an application if the proposed repayments are not sustainable or if required information is missing.
Does interest continue during an instalment plan?
Interest may continue to accrue, although IRD may reduce penalties in certain circumstances.
What happens if I miss a payment?
Missing instalments can result in cancellation of the arrangement and further enforcement action.
You can explore our full range of IRD-related assistance on our IRD tax services page.