Why Inland Revenue Liquidated Nearly 900 Companies This Year

If you’ve been sensing a shift in the business climate lately, you aren’t imagining things. Inland Revenue (IR) has officially taken the gloves off.

According to a new report from RNZ, the tax department has moved to liquidate nearly 900 companies in the past year alone. November was particularly brutal, with applications to wind up more than 120 businesses filed in a single month.

For business owners and observers alike, this is a wake-up call. Here is the breakdown of what is happening, why it’s happening, and what we can expect heading into 2026.

The Numbers Are Staggering

To put the “900 companies” figure into perspective, this level of enforcement easily exceeds anything we have seen in the last five years. While it is typical for IR to ramp up activity toward the end of the calendar year, the scale of this crackdown is unprecedented in recent times.

The department is no longer just sending stern letters; they are taking terminal action against businesses that cannot—or will not—pay their tax bills.

It’s Not Just One Industry

It would be easy to assume this is a problem specific to hospitality or construction—sectors often cited in insolvency news. However, the report highlights that the debt is widespread. It is not isolated to a single industry or business type. From trades to professional services, the dragnet is catching a wide variety of entities.

This suggests that the economic headwinds of the last few years—high inflation, reduced consumer spending, and supply chain issues—have eroded the buffers of businesses across the board.

Why Now?

During the COVID-19 years, Inland Revenue adopted a more lenient, supportive stance to keep the economy afloat. That grace period is effectively over. The department is now focused on clearing a massive backlog of overdue tax debt.

This crackdown targets what are often called “zombie companies”—businesses that are technically insolvent but continue to trade, often using tax money (PAYE and GST) to fund their cash flow. By liquidating these companies, IR stops the debt from spiraling further and prevents these entities from competing unfairly with compliant businesses.

No Let-Up in 2026

If you are hoping this is a temporary blitz, think again. The message from the report is clear: don’t expect a let-up in 2026.

Experts predict this aggressive approach will continue until at least the middle of next year. The volume of debt is so significant that it will take time to “wash through” the system.

The Takeaway for Business Owners

The era of using the IRD as an unauthorized overdraft facility is finished. If your business is carrying tax debt, the window to negotiate a payment arrangement is narrowing.

The liquidation figures serve as a stark reminder: if the tax department believes there is “nothing to be had” and no viable path forward, they are now more willing than ever to pull the plug.

What are your thoughts on this crackdown? Is it a necessary cleanup of the economy, or too harsh given the current trading environment?