I was speaking to the group of amendments and I had started to make a detailed response to amendment No. 231. To recap, amendment No. 231 would mean that the regulations made under the clause could not provide for a penalty to be charged where an employer did not comply with the requirement to send their return electronically. The regulations made under these powers will require employers to send certain returns electronically and require those returns to meet the quality thresholds. Earlier, we discussed quality thresholds that are providing for the information that legislation, and the Inland Revenue, require to comply with the pay-as-you-earn regulations.
Regulations cannot be effective without some form of sanction for those who fail to comply. That is the experience of this Government and Treasury Ministers; the Conservative Government reached the same conclusion. Employers have the choice of sending their returns electronically themselves or using an intermediary, such as a payroll bureau, so no-one should have to pay a penalty. As I said this morning, we are paying a fee to encourage employers to make that transition.
Where a non-electronic or substandard return is submitted, the clause will allow the Inland Revenue to provide in the regulations either to treat the return as not made or to charge a fixed penalty. The amount of any fixed penalty will be linked to the employer's size, which is normal procedure. The clause sets an upper limit of £3,000 for penalties and, in line with normal practice, only the most serious failures would attract
the maximum penalty. The actual amounts of the penalty for each category of employer size will be specified in the regulations; the practice is well known.