New Zealand companies are being put into liquidation at the fastest rate since 2010, and Inland Revenue is behind most of the court cases pushing them there.
Companies Office figures updated on 4 September show 1,916 companies were placed in liquidation in the first eight months of 2026. That is the highest January to August count since 2010, when 2,053 companies were wound up over the same months, and it is up 9.6 percent on the same period last year. It is also more than double the 939 recorded in the first eight months of 2022.
Newswire’s analysis of the Companies Office monthly series, which runs back to 2001, puts this year fourth out of 26, behind only 2008, 2009 and 2010 as the global financial crisis worked its way through the economy. August alone brought 230 liquidations, the most for that month since 2010.
Insolvency firm McDonald Vague reached the same conclusion from its own data. Its August report, published on 8 September, counted 274 corporate insolvency appointments during the month and 2,099 so far this year. That already exceeds the full-year totals for 2019 through 2023, and the firm says it places 2026 “on track for the strongest annual result since the aftermath of the Global Financial Crisis.” Its count includes receiverships and voluntary administrations and is compiled differently from the Companies Office figures, but both point the same way.
The clearest finding in the report is who is taking companies to court. Of the 149 winding up applications filed in August, 119 were brought by Inland Revenue. That is almost 80 percent of the total and the highest August figure for the department in McDonald Vague’s records. The 149 applications were also the most for any August in the firm’s dataset and 25 percent more than a year earlier. Applications so far this year have reached 934, more than the full-year totals for every year from 2018 to 2023.
McDonald Vague’s July report recorded 519 winding up applications advertised by Inland Revenue in the first seven months of the year, against 456 a year earlier. Adding August’s 119 takes the department to 638 for the year, about two-thirds of all applications filed. Applications from other creditors, the August report says, “increased only modestly, suggesting the current surge is being driven less by an aggressive shift from trade creditors and more by Inland Revenue’s ongoing efforts to recover historic tax arrears.”
The debt behind that effort is large. RNZ reported in August that overall tax debt stood at $9.4 billion in March, of which Inland Revenue said $5.9 billion was collectable. Micro and small businesses owed 65 percent of the outstanding debt, and GST and employer deductions such as PAYE made up 57 percent.
Keaton Pronk, the McDonald Vague insolvency practitioner who wrote the report, told RNZ that a lot of business debt is quite old and the department is now closing in on $10 billion of tax owing. “Some of the companies do have debt from over Covid, when they just weren’t applying the pressure,” he said. He said repaying several hundred thousand dollars was a huge amount for a business with maybe one or two staff that was only making several hundred thousand a year. “When IRD says ‘we want that repaid in two years’ that becomes very difficult for a business to be able to do that.”
Very few of these companies are being rescued. Liquidations made up 88 percent of August’s appointments, split between insolvent liquidations at 53 percent and court-ordered liquidations at 35 percent, with receiverships at 5 percent. McDonald Vague says the lack of restructuring work “may indicate that many distressed businesses are seeking advice only once their financial position has become untenable, leaving fewer opportunities for rescue or turnaround solutions.”
No single industry stands out. “It’s kind of across everywhere, but the North Island is perhaps not going as well,” Pronk told RNZ. The report describes an uneven recovery “with a growing divide between the North and South Island and different regions.” Hospitality has been one of the hardest hit parts of the economy, and Centrix figures reported earlier this month showed almost 3,000 hospitality businesses stopped trading in the past year.
Borrowing is also getting dearer. The Reserve Bank lifted the official cash rate by 25 basis points to 2.75 percent on 2 September, and the big banks passed the full rise to floating mortgage rates within a day. McDonald Vague’s report points to “a slow economy and a rising OCR” as reasons many businesses are still struggling to clear tax debt built up in earlier years. The path of the cash rate is tracked in our OCR tracker.
Households look very different. Personal insolvencies, which cover bankruptcies, no asset procedures and debt repayment orders, totalled 117 in August and 812 so far this year. That is slightly ahead of 2025 but less than half the annual numbers recorded in 2018 and 2019. “For now, personal insolvencies remain the dog that isn’t barking,” the report says. It fits with Centrix data last month showing fewer New Zealanders behind on their bills than at any time since 2021, even as company failures climbed.
McDonald Vague does not expect a quick turnaround. “Realistically, it’s probably going to continue this way I would say at least into 2027,” Pronk told RNZ. The report adds that the usual wait and see before an election “may push the increased insolvency into 2027 rather than having it all wash out in 2026.”
The Companies Office numbers give a rough sense of where the year could end. Last year 61 percent of all liquidations had been recorded by the end of August. If the rest of 2026 follows the same pattern, the full-year count would land at around 3,140. That would be more than 2010’s 3,024 and the most since 2009, when 3,431 companies were liquidated. Last year’s total of 2,867 was already the highest since 2010.
Has your business had a letter from Inland Revenue about old tax debt, or have you watched firms around you close their doors this year? Tell us in the comments below.
This article was written by AI, briefed to report the facts, hopefully without some of the bias people bring to the job 🙂
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