Funding a GST bill when the cash isn't there

GST is one of the most predictable bills a New Zealand business faces, and yet it catches people out constantly. The reason is simple: the GST you collect sits in the same account as everything else, and by the time the return is due, some of it has already been spent on wages, stock and rent.

If your GST payment is coming up and the balance won’t cover it, you have options — and the earlier you act, the more of them you keep.

How does GST timing create a cash gap?

GST in New Zealand is charged at 15% on most goods and services. When you sell something for $115 including GST, $15 of that belongs to Inland Revenue. A handy rule: the GST share of any GST-inclusive figure is three twenty-thirds.

Depending on your turnover and choice, you file monthly, two-monthly or six-monthly. Returns and payments are generally due on the 28th of the month after the period ends, with two well-known exceptions: the period ending in November is due on 15 January, and the period ending in March is due on 7 May.

The gap appears when:

• a strong selling period produces a large GST bill, but customers paid slowly;
• you bought stock or equipment and claimed less GST than expected;
• the six-monthly filer simply under-saved over a long period;
• the business grew faster than its tax savings habit.

What happens if GST is paid late?

Inland Revenue can charge late payment penalties and use-of-money interest on unpaid tax. On top of the direct cost, a pattern of late payments makes future conversations with lenders, suppliers and IRD itself harder. Filing the return on time — even if you can’t pay in full — is always the first step, because late filing creates a separate penalty.

What are my options when GST is due?

Option	How it works	Things to weigh
Instalment arrangement with IRD	Spread the debt over agreed payments	Interest can keep running; future returns must stay current
Unsecured short-term loan	Lump sum paid to IRD, repaid over weeks or months	Sized on bank statements; same day possible for smaller amounts
Business line of credit	Draw what you need, repay as sales come in	Useful if GST gaps happen every period
Property-secured loan	Larger amount against home or commercial property	Best for big or combined tax debts

There is no single right answer. A business with a one-off spike and a strong account often prefers to clear the bill with a short loan and repay from the next few months’ trading. A business with recurring shortfalls might be better served by a line of credit sized to cover each return. If several tax bills have stacked up, our IRD debt loans page looks at consolidating them.

How much should I borrow for a GST bill?

Borrow the bill, plus a small buffer if your next few weeks are tight — not more. A useful way to size it:

1. Take the GST payable figure from your return.
2. Subtract what you can genuinely pay today without leaving wages or rent short.
3. Add any amount needed to keep the account above zero for the following fortnight.

Our Cash Flow Gap & Fast Loan Matcher does this automatically: enter your monthly money in and out plus the GST amount, and it shows the size of the gap and the fastest realistic way to cover it.

When you are ready, you can find out what your business could get in about 60 seconds, with no credit check at that stage.

How do I stop GST becoming a cash problem next time?

Funding fixes this period; habits fix the next one. Practical steps that Kiwi owners use:

• Move three twenty-thirds of every GST-inclusive deposit into a separate tax account each week.
• File more often. Two-monthly or monthly filing means smaller bills and fewer surprises.
• Watch the big months. Your busiest season creates your biggest GST bill one period later — plan for it.
• Keep the return on time even when you can’t pay, so penalties stay as small as possible.

Our guide on what to do when GST is due and you can’t pay walks through these choices step by step.

Ready to get your GST sorted?

A GST bill is a short, well-defined problem, which makes it one of the easier things to fund. Tell us the amount and when it is due. Nobody checks your credit when you first enquire, your information goes to one person rather than a pile of lenders, and that person rings you to talk through the quickest sensible route.

Give us accurate figures — the GST amount, your rough monthly turnover and whether any property is available — and we can point you in the right direction on the first call. Start your GST funding enquiry.