As a taxpayer, it is your responsibility to file your tax returns and pay your taxes on time. However, there may be situations where you are unable to pay your taxes on the due date. In such cases, there are various options available to you in New Zealand to help manage your tax debt. In this article, we will discuss the options available to taxpayers who are unable to pay their tax debt on time.
Request an instalment arrangement
If you are unable to pay your tax debt on time, you may be able to request an instalment arrangement from the Inland Revenue Department (IRD). This will allow you to pay your tax debt in instalments over a period of time. You can request an instalment arrangement by contacting the IRD by phone or online. The IRD will assess your financial situation and determine if you are eligible for an instalment arrangement.
Request a payment holiday
If you are unable to pay your tax debt due to a temporary financial hardship, you may be able to request a payment holiday. A payment holiday allows you to temporarily stop making payments on your tax debt. However, interest and penalties will continue to accrue during this time. To request a payment holiday, you will need to contact the IRD and explain your situation.
Use a credit card or loan
If you are unable to pay your tax debt on time, you may be able to use a credit card or loan to pay it off. However, you should be aware that this may result in additional fees and interest charges. You should also consider whether taking on additional debt is a sustainable solution for your financial situation.
Seek professional advice
If you are unsure about your options for managing your tax debt, you may want to seek professional advice from a tax accountant or financial advisor. They can provide you with personalised advice based on your individual circumstances and help you navigate the options available to you.
In conclusion, there are various options available to taxpayers who are unable to pay their tax debt on time in New Zealand. It is important to communicate with the IRD as soon as possible and explore your options for managing your tax debt. Remember that failing to pay your tax debt can result in penalties and interest charges, so it is important to take action as soon as possible.