I echo the hon. Lady’s sentiments. I did not anticipate that I would be able to bring my experience from the Public Accounts Committee so directly to bear in this Committee, but I alert hon. Members to another session that we had recently with the chairman of HMRC on filing VAT and company tax returns, because it is directly relevant to this clause. It became apparent from our discussions that the proportion of companies that file their tax returns online has increased from 2 per  cent. in the year ending March 2006 to 7 per cent. in the year ending March 2007. HMRC’s target for company tax returns for March 2008 is 35 per cent. The chairman acknowledged that increasing performance regarding company tax returns in the next 12 months would be a tough act.

On VAT, the proportion of companies that filed their returns online in the year to March 2006 was 5 per cent. That performance improved to 9 per cent. for the year ending March 2007, but the target for the year ending March 2008 is 50 per cent. and the target for March 2010 is 100 per cent. HMRC’s performance in achieving its targets for online returns has, by its own admission, been modest at best.

The clause will give HMRC the ability to encourage companies to file online returns by law, but I add my voice to that of the hon. Member for Falmouth and Camborne to urge the Financial Secretary not to take advantage of the mandatory powers introduced by the Bill until such time as HMRC can cope with returns.