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Have you noticed a shift in the IRD’s approach this year? Whether you’re an accountant, finance broker, or business operator, the message is clear: The IRD is not messing around.
After a period of lenience under the previous government, the IRD has become particularly stringent in collecting business tax debt.
Payment plan proposals are being rejected more frequently, with the IRD imposing their own terms, often demanding large upfront payments. Legal action against directors who fail to meet these steep demands has also increased.
Have you ever considered using tax funds for other business purposes? The IRD is cracking down hard on directors who knowingly misuse funds intended for tax obligations. While there might be some leniency for negligence, there is little tolerance for those intentionally using “the IRD’s money”. Many business owners have seen undue tax funds as a cheap alternative to borrowing money, planning to repay with the profits generated from their investments. But what happens if things don’t go as planned? What if the investment doesn’t yield the expected returns and you can’t repay the funds in time? You could find yourself in serious trouble.
A client with numerous small business interests used his undue tax funds to purchase a new business. With nearly maxed-out overdrafts on all his businesses, the new venture did not perform as expected. When he was hit with a $1.1 million tax bill, he didn’t have the funds to pay it immediately.
He approached the IRD with a proposal for a payment plan, which they rejected, demanding nearly $450,000 of the debt by the end of the week or face legal action.
Within just a couple of days, we at Capital Connect were able to secure a six-month term facility of $550,000, secured only by General Security Agreements (GSA) and Personal Guarantees (PGs) against the business. This was not secured by a mortgage or position against a property. Thanks to our strong relationships with funders, the client’s approval went through swiftly, without any problems, allowing him to meet his obligation on time.
Are you facing similar tax debt issues in your business? Do you need a business loan to help meet your tax obligations? At Capital Connect, we specialise in providing quick, reliable financial solutions tailored to your needs. Don’t wait until it’s too late. Reach out to us today and let us help you navigate through your financial challenges.
Visit Capital Connect to learn more and get in touch with us.
