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Using the income tax debt pilot scheme 

The income tax debt pilot scheme allows eligible taxpayers to use tax pooling to purchase historic tax liabilities for the 2023 and 2024 income tax years under an extended settlement window. This article explains what you’ll see in the portal, how to proceed, and what confirmations are required.

When can the scheme be used?

  • This scheme covers tax liabilities in the income tax periods 2023 and/or 2024. You are able to use this for initial assessment amounts. 
  • This scheme is for provisional tax (excluding AIM), terminal tax and interest on provisional or terminal tax under part 7 of the Tax Administration Act 1994. 
  • In order to use this scheme, an arrangement must be set up in the Tax Traders system by Thursday 01 October 2026. 
  • The final payment date within the portal for transactions under this scheme is 28 September 2027 which will allow us to get the funds across to IR prior to the final payment deadline on 01 October 2027. 
  • You must meet the eligibility criteria below (or have Commissioner's discretion to use the scheme). 

How to access the pilot?

When you enter a purchase amount in the buy tool for income tax periods 2023 and/or 2024, the portal will detect that the selected tax periods fall outside the standard purchase window.

You’ll then be shown a message explaining this and be asked how you would like to proceed.

Choosing how to proceed

You’ll be asked to select one of the following options:

Income tax debt pilot scheme – extended settlement window

Select this option if the taxpayer is eligible for the income tax debt pilot scheme. This allows you to proceed under the extended settlement window made available as part of the pilot.More details below. 

Reassessment – standard reassessment process

Select this option if the taxpayer wishes to proceed through the standard reassessment process instead. Learn more about reassessments HERE. 

If you select the income debt pilot scheme:

Before proceeding, you must confirm one of the following:

  • Confirm the taxpayer meets all eligibility criteria listed below, or
  • Confirm that the Commissioner’s discretion has been provided for the taxpayer to use this scheme.

    Please note, the Commissioner of IR is able to waive some of the eligibility criteria listed where the given taxpayer received financial relief under s177 of the Tax Administration Act 1994. 

A confirmation of either option is required to proceed under the income tax debt pilot scheme.

Eligibility criteria

To proceed under the income tax debt pilot scheme, the taxpayer must meet the following requirements:

Status requirements

  • The taxpayer is not bankrupt or in liquidation.
  • The taxpayer has not been presumed unable to pay their debts under section 287 of the Companies Act 1993 at any time in the previous 12 months.
  • The taxpayer has not committed an act of bankruptcy under the Insolvency Act 2006 at any time in the previous 12 months. The taxpayer is not the subject of legal recovery proceedings for unpaid tax.
  • The taxpayer is not the subject of legal recovery proceedings for unpaid tax.

Returns and information up to date

  • The taxpayer has filed all required income tax returns
  • The taxpayer has filed all required GST returns.
  • The taxpayer is not the subject of legal recovery proceedings for unpaid tax.

No outstanding amounts

  • The taxpayer has no overdue GST payable.
  • The taxpayer has no overdue employment-related tax amounts.

Key dates to be aware of

  • Final date to set up an arrangement: 30 September 2026
  • Final deadline to have an arrangement in place: 01 October 2026
  • Final payment date in the portal: 28 September 2027
  • Final settlement deadline with Inland Revenue: 01 October 2027

Any payment arrangement entered under the pilot scheme must be fully settled and transferred to Inland Revenue by the IR deadline.

Need help?

If you’re unsure whether a taxpayer meets the eligibility criteria or whether Commissioner’s discretion applies, please confirm this before proceeding with an arrangement, as eligibility is attested as part of the transaction process.

If you would like to learn more about requesting Commissioner's discretion, please learn more HERE. As mentioned above, the Commissioner of IR is able to waive some of the eligibility criteria listed where the given taxpayer has received financial relief under s177 of the Tax Administration Act 1994. 

Learn more about the income tax debt pilot scheme HERE.