Flat rate error

I was interested to read Neil Warren’s article Using the force about the flat rate scheme and the Idess case (TC3638). This was where the First-tier Tribunal supported the taxpayer’s view that a mechanical engineer was not a structural engineer and could therefore adopt the flat rate percentage of 12% for other services rather than the higher rate of 14.5% for civil/structural engineers.

My client is a mechanical engineering consultant working in the car industry and we adopted the 14.5% rate for structural engineers based on the guidance at HMRC’s VAT Notice 733: Flat rate scheme for small businesses at paragraph 4.4.

This states that “engineering consultants and designers” should adopt the rate for “architects structural and civil engineers”. In the light of the Idess case should we now treat this as an error and reclaim the 2.5% tax overpaid for the past four years?

The...