Oxfam has decided not to appeal against a High Court ruling from last year which prevented it from retrospectively claiming VAT worth £3m.

The charity had cited a 2005 case in which the Children’s Society had successfully argued that it should be able to partially reclaim VAT on fundraising costs.

Oxfam therefore said it should be able to backdate its own fundraising costs to 1997.  However, in its judgement handed down last year, the Court upheld a previous VAT tribunal decision in which HMRC successfully argued that the repayment method it had agreed with Oxfam was fair and reasonable.

It had been hoped that if Oxfam won the case, other charities would be in line for similar claims.

The decision makes clear that although charities can negotiate VAT calculations with HMRC year-on-year, there is no requirement for HMRC to revisit past agreements.