Growth is expensive in ways that don’t show up on your Shopify dashboard. The better your quarter, the bigger the GST return. The better your year, the bigger the provisional tax that follows. For fast-growing young businesses, the tax bill often lands right when the cash has already been reinvested into stock, staff and ads.
Why fast growth creates tax crunches
GST. Once you’re registered, you collect 15% GST on taxable sales and pay it to Inland Revenue each period, minus GST on your costs. If you’ve just had a big month, the return can be larger than the cash you have spare — especially if that cash has gone into stock for next month.
Crossing the GST threshold. You must register for GST if your turnover was at least $60,000 in the last 12 months or is expected to be at least $60,000 in the next 12 months (Inland Revenue). Fast-growing businesses sometimes cross that line without noticing and then have to account for GST they didn’t charge. See our GST threshold guide.
Provisional tax. If your residual income tax for the previous year was more than $5,000, you’ll generally pay provisional tax during the current year. In a growth year the first bills can bunch together — last year’s terminal tax plus this year’s first instalment. Our first-year provisional tax guide unpacks it.
Options when a big IRD bill lands
| Option | Best when | Keep in mind |
|---|---|---|
| Pay from cash | You’ve set tax aside | The ideal, but not always possible in a growth year |
| Line of credit | Repeating timing gaps, e.g. every GST period | Repay from trading before the next return |
| Unsecured loan | One-off lump, healthy trading | Sized to turnover; usually 6+ months trading |
| Property-secured loan | Large amounts or existing IRD debt | $20,000 to $1m; can pay out IRD debt |
| IRD instalment arrangement | You need to spread payments with IRD directly | Formal agreement needed; penalties and interest can still apply |
Paying out existing IRD debt
If tax has already fallen behind, it tends to snowball: penalties and interest build, and IRD’s collection activity steps up. In October 2025 Inland Revenue said it had begun contacting customers with overdue GST and employer tax debts over $1,000 that were between six months and five years old, and that it had been using bank deduction notices more frequently (Inland Revenue).
A property-secured business loan can refinance or pay out IRD debt in one go. Bad credit, defaults and arrears are considered case by case, and no financials or tax returns are needed for the initial assessment. Our guide to IRD tax debt options compares this with an instalment arrangement.
Stop the next crunch
- Open a tax account. Move a slice of every payout into a separate savings account for GST and income tax.
- Match GST filing to your cash cycle. Monthly, two-monthly or six-monthly (if turnover is under $500,000) — choose what makes budgeting easiest.
- Consider the payments basis. If your turnover is $2m or less you can account for GST when money actually changes hands, which can smooth cash flow for businesses that invoice on terms.
- Talk to your accountant about provisional tax options — standard, estimation, ratio or AIM — and whether tax pooling suits you.
Example scenario
Example scenario — generic and illustrative only. An Auckland e-commerce brand doubled its revenue this year. It’s now facing last year’s terminal tax and its first provisional instalment within weeks of a bumper GST return, while most of its cash sits in winter stock. The owners use a line of credit sized to turnover to pay IRD on time and repay it over the next two months from sales, avoiding penalties and interest.
Pay IRD on time, keep growing
Enquire in about 60 seconds — free and no impact on your credit score. A lending specialist will talk through whether a line of credit, an unsecured loan or a property-secured loan suits your tax situation.