Your Christmas shutdown cash plan: surviving December to February

Every year Mr gets the same phone calls in the second week of January. The owner has had a lovely break at the bach, the business has reopened, the account is lighter than expected, and there’s a tax bill due on the 15th. None of it is a surprise — it just wasn’t planned. This guide is your October head start.

Why is the summer break so hard on cash?

New Zealand’s Christmas shutdown is a perfect storm for cash flow, because three things happen at once:

1. Money stops coming in. Many of your customers close too, and their accounts teams go on leave. Invoices raised in mid-December often aren’t paid until late January.
2. Costs keep running. Rent, leases, insurance, subscriptions and loan repayments don’t take a holiday.
3. Big payments cluster. Holiday pay, the December payroll, and a tax date on 15 January land close together.

For hospitality and tourism businesses in summer hotspots, the picture is reversed — December to February is the peak. But for most trades, professional services, manufacturers, wholesalers and B2B businesses, the summer break is the leanest stretch of the year.

What’s due between December and February?

For a business with a 31 March balance date, the key dates are:

Date	What’s typically due
20 December	Employer deductions for November pay (small employers)
15 January	GST for the period ending 30 November; second provisional tax instalment (standard or estimation option); large employers’ deductions for 16–31 December pays
20 January	Employer deductions for December pay (small employers)
28 January	GST for the period ending 31 December (monthly filers)
28 February	GST for January period; ratio-option provisional tax instalment

If a due date falls on a weekend or public holiday, you can pay on the next business day without penalty. The tax due dates tool builds your own list based on how you file.

Step 1: List every outgoing from mid-December to the end of February

Grab last year’s bank statements for those ten weeks. They’re the best predictor you have. Then list:

• Wages and holiday pay, including any closedown arrangements in your employment agreements.
• Employer deductions — PAYE, KiwiSaver (now at the higher default rate since 1 April 2026), student loan, child support.
• GST due on 15 January and 28 January or 28 February, depending on your filing.
• Provisional tax due on 15 January (and 28 February for ratio).
• Rent, leases, loan and finance repayments.
• Insurance, software, phone and other direct debits.
• Supplier accounts due in January for December purchases.

Total it. That’s the money you need between now and the end of February, before a single new sale.

Step 2: Map what will actually come in

Be honest — Mr’s rule is to assume January is slower than you hope.

• Invoices raised by early December — will clients pay before they close? Ask them.
• Invoices raised mid-to-late December — assume late January at best.
• January trading — how quickly did work pick up last year? Many trades don’t hit full speed until the first week of February.
• Deposits or progress payments — any known dates?

Put the expected receipts against the outgoings week by week. The lowest point in your running balance is the number to plan for. Our twelve-month cash flow forecast guide shows a simple layout you can reuse all year.

Step 3: Pull cash forward in November and early December

The cheapest money is your own, arriving sooner:

• Invoice early and often. Move to progress or weekly invoicing on bigger jobs.
• Chase debtors before they close. A polite reminder in the first week of December beats a stern one in mid-January.
• Ask for deposits on work booked for January and February.
• Offer a small early-payment incentive if your margins allow.
• Clear slow stock before the break rather than paying to store it.

Step 4: Push some costs back, sensibly

• Ask key suppliers whether December purchases can be on extended terms.
• Time annual subscriptions and insurance renewals away from January where possible.
• Talk to your landlord about rent timing if January is consistently tight.
• Avoid major discretionary spending in December unless it’s funded.

Never push tax back by simply not paying it. Late payment penalties start the day after the due date, and IRD has been actively following up overdue GST and employer debt.

Step 5: Set aside the tax now

The 15 January payments are the ones that catch people. If you haven’t already, open a separate account for tax and move money into it weekly from October. By mid-December you want the January GST and provisional tax already sitting there, untouched.

If you won’t be able to cover the January tax in full, contact IRD before the due date. An instalment arrangement is generally better than silence, and it’s easier to discuss before the debt is overdue. See what’s an instalment arrangement and will a lender care?

Step 6: Decide whether you need funding — and arrange it early

If, after all of the above, your running balance still dips below zero, you’ve found a funding gap. That’s fine. It’s predictable, it’s explainable, and it’s exactly the kind of gap lenders understand.

What matters is timing. Arranging funding in October or November means:

• lenders, valuers and lawyers are working normal hours;
• you can compare options calmly;
• the money is in place before the break.

Trying to arrange it in the first week of January means everyone’s on leave and the tax date is days away. If you want to explore it now, send a quick enquiry — there’s no credit check to ask.

Options that commonly suit a summer gap:

• A short-term unsecured facility, sized on turnover, repaid as February and March trading picks up.
• A property-secured loan, if the gap is larger or other debts need tidying at the same time.
• Borrowing specifically for the January GST and provisional tax, paid directly to IRD — see should I borrow to pay my GST bill?

An illustrative example

This example is invented.

A Hamilton building company with eight staff closes from 20 December to 11 January. Last year it reopened to a near-empty account, paid the 15 January GST and provisional tax late, and spent February catching up on penalties.

This year, in October, the owner:

1. lists every outgoing to the end of February and finds a gap in the second half of January;
2. switches two large jobs to fortnightly progress claims;
3. emails every client on 1 December with a reminder of invoices due before the break;
4. opens a tax account and transfers a set amount every Friday;
5. arranges a modest short-term facility in November to cover the remaining January gap, to be cleared by the end of March.

On 15 January the GST and provisional tax are paid on time from the tax account. The facility covers wages for two lean weeks and is repaid early, from February progress payments.

Your October checklist

• Pull last year’s December–February bank statements.
• List every outgoing to the end of February, including 15 January tax.
• Map expected receipts week by week.
• Set up or top up a separate tax account.
• Contact clients about payment before they close.
• Talk to suppliers and your landlord about timing.
• If there’s still a gap, arrange funding before mid-November.

Ready to plan your summer?

If your plan shows a gap, let’s sort it while everyone’s still at their desks. Tell us how big the gap is, when it falls and what your business looks like across the year. Asking won’t put a mark on your credit file, your details stay with the one person looking after you rather than going to a crowd of lenders, and a real specialist will ring you to talk it through.

Please be as accurate as you can about the size and timing of the gap — it lets us suggest something that’s in place before you lock up for the holidays. See what’s possible before the break.