An Oxfordshire opera company has secured itself a few extra ‘tenors’ after scoring a victory over the taxman.

Garsington Opera has clawed back £250,000 in VAT and legal costs after a lengthy court battle with the Government over tax payments.

The argument was over how HM Revenue and Customs calculated its VAT payments and is worth about £35,000 a year – the difference between breaking even or making a loss.

But a tribunal ruling upheld an appeal made by the opera company, meaning it will get a £130,000 rebate from the past three years.

And, with legal costs on top, Garsington Opera can expect to receive back £250,000.

Anthony Whitworth-Jones, its general director, said: “It’s a very technical matter, but will make a big difference to us.

“We’re absolutely delighted.

“It’s the difference between us breaking even in the year and not.

“The Government believed that we should make our tax payments in a particular way and we thought different.

“I don’t think we were being picked on.

“Every year we roughly break even.”

The dispute surrounded a method in calculating the recovery of ‘Input Tax’, in relation to Garsington’s status as a partially-exempt charitable company.

A legal battle which has lasted almost two years culminated with a four-day hearing at the HMRC appeals tribunal in London, which took place in two stages in January and March.

The tribunal’s chairman, Sir Stephen Oliver, has now revealed its decision, meaning Garsington Opera will save up to £35,000 a year in tax payments.

Mr Whitworth-Jones added: “Our situation is very specific.

“We have a month-long summer season, which is funded by ticket sales, sponsorship and sponsorship rights, and private donations.

“This sum of money represents an enormous amount to us.

“The tribunal’s conclusion that there was a direct and immediate link between the opera production costs and, among other output items, the grants of sponsorship rights, means that Garsington Opera can consider its financial future with greater confidence.”

It is not known if the HMRC plans to appeal against the tribunal ruling.

A Government spokesman said: “Following the decision, HMRC will consider carefully before deciding the next course of action.”

Garsington Opera runs for a month every year in the grounds of Garsington Manor and has about 100 performers.

Its 2009 season opens on June 4 and productions of Beethoven’s Fidelio and Rossini’s La Cenerentola are sold out.

Tickets are still available for performances of Martinu’s Mirandolina by calling 01865 361636 or log on to garsingtonopera.org