Electronic filing for compliance reduction 3 Nov 2016 BusinessNZ welcomes the work being done to enable businesses to move from paper to electronic filing of PAYE. The Government has announced will introduce legislation next year to require electronic filing in 2019.Employers above a certain tax threshold would be required to file electronically, unless they do not have relevant computer or internet access, and PAYE filing would need to be integrated into their payroll software to allow electronic filing to occur.Smaller businesses would have the option of staying with paper filing or moving to electronic filing, and electronic filing would still be possible via the IRD website without having to purchase payroll software Businesses would be able to choose whether to file electronically on the actual payday or to continue to file monthly or twice monthly as currently. BusinessNZ Chief Executive Kirk Hope said the move would mean reducing the number of times businesses must communicate with IRD, and business would welcome this - but some enterprises currently have a benefit in retaining PAYE and related deductions as working capital until it must be paid to Inland Revenue, and filing electronically on payday would mean this time use of money would be lost.He said in this case a smoother overall tax compliance procedure would probably more than offset the loss of ability to use money or interest involved as cashflow."Filing directly to the IRD from payroll software would reduce compliance for businesses," Mr Hope said. "However it represents a significant change that would need to be perfectly implemented. "Recent payroll software problems in a number of government agencies points to the need for meticulous implementation. More work needs to be done on issues such as how information may be updated or corrected where necessary in an electronic format."BusinessNZ supports the move in principle subject to scrupulous management of the change."