Why Is My Accountant Asking for My Driver Licence?
Understanding why accountants now request identity verification under Australia’s evolving professional and AML obligations.
“I’ve been with my accountant for years. Why are they asking for my driver’s licence now?”
It’s a fair question and one we’re hearing more frequently.
If you’ve recently been asked to provide identification, don’t be alarmed. It doesn’t mean you’ve done anything wrong, nor does it mean your accountant suddenly doesn’t trust you.
In fact, the opposite is often true.
Professional accountants have long had responsibilities to verify the identity of their clients before acting on their behalf. More recently, Australia’s Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) reforms have introduced additional obligations when accountants provide certain higher-risk professional services.
Understanding why these checks are required can help make the process quicker, easier and less frustrating for everyone involved.
Two reasons your accountant may ask for identification
Many people assume the recent AML reforms are the only reason accountants are requesting identification.
They aren’t.
There are actually two separate reasons you may be asked to verify your identity.
Firstly, registered tax and BAS agents have existing professional obligations to ensure they are acting for the correct individual or authorised representative before accessing confidential tax information or lodging documents with the Australian Taxation Office.
Secondly, from 1 July 2026, Australia’s expanded AML/CTF laws require additional customer due diligence when accountants provide certain higher-risk professional services known as designated services.
Although these obligations overlap in some situations, they serve different purposes.
The important point for clients is simple:
Being asked for identification has become an expected part of professional practice and helps protect both you and your accountant.
What changed on 1 July 2026?
Australia has expanded its AML/CTF regime to include a number of professional service providers, including accountants, lawyers, conveyancers and real estate professionals.
For accountants, these obligations do not automatically apply to every tax return or accounting engagement.
Instead, they generally apply when an accountant provides certain designated services involving higher-risk activities.
Depending on the engagement, these services may include:
- establishing or restructuring companies, trusts or other legal entities
- assisting with certain business or property transactions
- arranging company or trust officeholders
- providing registered office services
- assisting with particular financing or ownership arrangements.
Where these services are provided, accountants may need to:
- verify the identity of their client
- confirm who is authorised to act
- understand who ultimately owns or controls an entity
- identify beneficial owners
- understand the purpose of the engagement
- assess and manage potential financial crime risks.
For most clients, this simply means providing a little more information before work begins.
What does this mean in practice?
For many everyday engagements, very little will change.
If you’re engaging your accountant to prepare an individual tax return, lodge a BAS or provide routine accounting services, the identification process is often straightforward.
However, if you’re establishing a new company, creating a family trust, purchasing a business, restructuring your affairs or undertaking more complex transactions, additional verification may be required.
While this may involve a few extra questions or documents, the process is designed to protect clients, businesses and Australia’s financial system.
What is a beneficial owner?
One term you may hear more often is beneficial owner.
A beneficial owner isn’t simply the person whose name appears on company records.
Instead, it refers to the individual who ultimately owns or controls an entity, either directly or indirectly.
For example, where a family trust owns shares in a company, your accountant may need to understand who ultimately controls the trust and who benefits from the structure.
These enquiries are a normal part of understanding ownership and are not an indication that anything is wrong.
“But you’ve known me for years…”
Long-term clients often ask this question.
And it’s completely understandable.
Knowing a client personally certainly helps, but professional obligations don’t disappear simply because a relationship has existed for many years.
In many cases, existing information can continue to be relied upon.
However, there are situations where updated identification may still be required, particularly if:
- directors or trustees have changed
- ownership structures have been altered
- important identification records are incomplete or outdated
- the nature of the engagement has changed
- higher-risk transactions are being undertaken.
These checks are applied consistently across clients and should never be interpreted as a reflection on a client’s honesty or integrity.
Common misconceptions
“Every accounting client must complete a brand-new AML check.”
Not necessarily.
The level of verification depends on the services being provided, the information already held and the circumstances of the engagement.
“My accountant must keep a copy of my driver’s licence.”
Not always.
We are required to maintain appropriate records of our identity verification processes to meet our legal obligations. Depending on the service provided, this may involve retaining verification records or other supporting information. Any personal information is handled in accordance with our privacy obligations and security procedures.
“I’ve done something wrong.”
Absolutely not.
Identity verification is now a routine part of professional practice and applies to clients from all walks of life.
Practical examples
Example 1 – An individual tax return
David asks Compact Accounting to prepare his annual tax return.
Preparing a standard individual tax return is not an AML/CTF designated service. However, Compact Accounting may still need to verify David’s identity before accessing his ATO information or acting on his behalf.
Example 2 – Establishing a family trust
Carolyn asks Compact Accounting to establish a family trust and corporate trustee.
Because this work involves creating legal structures, additional customer due diligence may be required before the engagement proceeds.
This may include verifying identity, confirming authorised representatives and understanding who ultimately owns or controls the structure.
Example 3 – A long-standing company client
A company has been a client for many years.
The company appoints a new director and changes its ownership before purchasing another business.
Although the client relationship isn’t new, updated identification and ownership information may still be required before the transaction proceeds.
Frequently asked questions
Will you keep a copy of my driver’s licence?
Not necessarily.
Depending on the engagement, we may simply verify your identity and retain a record that the verification was completed. Where identification documents are collected, they will be handled in accordance with our privacy obligations and internal procedures.
Can I provide my identification electronically?
Usually, yes.
Where possible, we will provide secure methods for submitting identification documents and encourage clients to avoid sending sensitive information through unsecured email.
What happens if I don’t provide the requested information?
We’ll always explain why the information has been requested.
If we are unable to complete the identification requirements for a particular engagement, we may need to delay or be unable to provide the relevant service until those requirements have been satisfied.
Final thoughts
Being asked to verify your identity is becoming a normal part of working with professional advisers.
While the process may occasionally feel inconvenient, it plays an important role in protecting clients, preventing fraud and ensuring accountants meet their professional and legal obligations.
At Compact Accounting, we aim to make the process as simple and straightforward as possible while treating your personal information with the care and confidentiality it deserves.
If you’re ever unsure why we’ve requested particular information, please ask. We’re always happy to explain the reasons behind the process.
Need further guidance?
Please contact us if:
- your identification shows an old name or address
- you’re acting on behalf of another individual, company or trust
- directors, trustees or ownership have recently changed
- you don’t have standard identification documents
- you’re unsure why certain information has been requested
- you have concerns about securely providing personal information.
Resolving these matters early often prevents unnecessary delays.
If you’re unsure how these requirements apply to your circumstances, please contact us. We’re always happy to explain the process and help you understand what’s required.
General Disclaimer
This article provides general information only and is current as at July 2026. It has been prepared for educational purposes and should not be relied upon as legal, taxation or financial advice. The identification requirements applying to a particular engagement will depend on the services being provided and your individual circumstances. If you have any questions about information requested as part of your engagement with Compact Accounting, please contact us.
References & Further Reading
- Australian Transaction Reports and Analysis Centre (AUSTRAC) – Anti-Money Laundering and Counter-Terrorism Financing guidance
- Treasury Laws Amendment (Measures for Consultation) materials relating to Tranche 2 AML reforms
- Tax Practitioners Board – Proof of Identity Requirements
- Australian Taxation Office – Online services and identity verification guidance
Last reviewed: July 2026