There is now real urgency to respond to IR Notices, as details of company’s serious tax debts look increasingly likely to be shared with credit reporting agency, Centrix. This emerging trend necessitates immediate attention from accountants and advisors-alike, who must guide their clients through these changes to avoid severe repercussions.
The Major Change
A recent IR pilot loosened criteria of what constitutes “reasonable efforts” required to be made by the IRD to arrange tax settlements, before arrears can be reported to Centrix.
Since 2017, the IR required one or more actual discussions with company directors about resolving the debt, to then be able to report IR arrears in Centrix.
The pilot, which commenced in October 2025, states “reasonable efforts” are to be made through the issuance of a Notice of Intent, couriered to the company’s registered office, as well as a notification, arriving in the company’s MyIR dashboard.
Following no response to this outreach in 30 days, the IR debt will be reported to Centrix.
Quickfire Q’s
Q: Threshold level for IR’s Intervention?
- Businesses facing significant debts of $150k+ or having unpaid tax debts for over 12 months
Q: Pilot Results?
- Within 30 days of the Pilot Program, when commenced October 2025, 43% of companies engaged with the IRD to resolve their debt. The remainder were reported to Centrix.
Q: The Impact of this Proposed Early IR Engagement
- Improved market stability and sustainability – Businesses that neglect their tax obligations risk underpricing services, which undermines market integrity
- Greater visibility for businesses extending credit terms
- Cutting future losses for the taxpayer, with businesses in irreversible business positions
- Increased IR prioritisation by clients. IR becomes a less suitable alternative to maintain cashflow. Currently, lenders and other creditors tend to chase up much faster than the IR.
Q: Where to from here?
- Policy document IR2025/398, ‘Policy Options to Reduce Tax Debt’ has not been publicly released as of yet. Though the positive pilot result would suggest a strong possibility of these changes soon becoming law
- For Accountants and advisors. This is another opportunity to make a difference in your clients and their planning. This could be as simple as ensuring your clients registered address is correct, to providing proactive cashflow and IRD management to clients.
- Auckland Finance has helped select clients in the past with IR-related scenarios, where the support is well directed and sustainable.
Difference Maker Moment – Cashflow Introduction Following IR Arrears Settlement
A client had stretched cashflow, after using business cash and a personally owned investment property to clear business IR arrears. With another staff member hired to deliver on improved demand for the clients services, Auckland Finance took existing vehicle security to smooth out the clients cashflow position. This put a spring in the step of the client, who is moving from consolidation and recovery, to growth.
Josh Veal
Business Development Manager
0274791090