The Parents and Friends Association at one of Sydney’s most expensive private schools has resigned en masse over concerns it had been structured to avoid paying tax on hundreds of thousands of dollars worth of fundraising activities.

Parents at the $20,000-a-year Loreto Kirribilli school were told the association had been dissolved due to increasing red tape. But documents seen by The Sun-Herald reveal all eight members of the P&F executive sounded the alarm about the body’s finances in March and resigned to protect themselves from potential prosecution over what they suspected were breaches of tax laws relating to its charity status.

Loreto Kirribilli. Credit:Fiona Morris

Lawyers for the school said two independent experts had found no issue with the accounts.

In a letter to principal Anna Dickinson, committee leaders said that three ABNs had been registered under its name by previous P&F committees ‘‘to avoid the compliance burden of registering for GST’’ despite total fundraising now exceeding the $150,000 threshold required to pay the tax. This ‘‘presented an unacceptable level of risk’’, they wrote, and they resigned ‘‘with immediate effect’’.

“Furthermore, the statement by the members of the executive committee attest to the accounts having been prepared to give a true and fair view of the financial position and the performance of the P&F Association, and yet this is clearly not the case,” the letter said. “Instead, they appear to have been prepared to avoid having to register the P&F Association for GST.”