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ans Serif">If you cannot pay your tax or other amounts on time you should contact Inland Revenue Department as soon as possible. IRD will consider your financial position and discuss with you the best option for dealing with your debt, and may take one or more of the following steps:

• ans Serif" color="#737373">Request immediate payment in full
• ans Serif" color="#737373">Enter into an instalment arrangement
• ans Serif" color="#737373">Defer debt collection action
• ans Serif" color="#737373">Grant relief or remission from payment of tax and/or penalties.

ans Serif">PAYMENT IN FULL
Consideration will be given to your financial situation, and if IRD think you are able to pay, they will ask you to make immediate payment of an outstanding debt in full. This may happen, for example, if you have:

• ans Serif" color="#737373">Sufficient funds in a bank account
• ans Serif" color="#737373">The ability to raise and service a loan
• ans Serif" color="#737373">Sufficient equity in assets to raise finance e.g. insurance policies, houses, cars or shares.

ans Serif">There are advantages in paying in full as this will avoid any penalties for late payment and interest that would be charged by IRD. If you raise money specifically to pay an IRD debt (and if you are running a business) any interest paid is tax-deductible whereas if you don't pay it on due date only interest charged by IRD (and not their penalties) are tax-deductible.

ans Serif">INSTALMENT ARRANGEMENTS
In some situations, if you are in financial difficulties, IRD may agree to an instalment arrangement. This is where the tax and any penalties and interest due are paid off in two or more instalments. Instalment arrangements can be agreed before or after the due date for payment of the tax. There are greater reductions in the penalties charged if the arrangement is agreed to before the due date.

ans Serif">IRD will generally accept an instalment arrangement after establishing that full payment cannot be made immediately. Factors they will take into account are:

ans Serif">Whether you are in financial difficulties. IRD considers a taxpayer to be in financial difficulties when their financial position means that debts cannot be paid in time, and either there is a real prospect that creditors will be able to have the taxpayer put into liquidation, or judged bankrupt, or the taxpayer's debts substantially limit the carrying out of normal income- producing activities.

• ans Serif" color="#737373">Whether the repayment proposal is realistic (can the instalment payments be met based on the income or other amounts being received?)
• ans Serif" color="#737373">Whether future tax liabilities can be met as well as the agreed instalment payments
• ans Serif" color="#737373">Whether any previous arrangements with IRD have been met
• ans Serif" color="#737373">Whether all returns have been filed
• ans Serif" color="#737373">Tax payment and return filing history
• ans Serif" color="#737373">Other recovery options available