Compliance
Compliance Essentials: Mandating FID and Eliminating Cheque Refunds in Tax Time 2026
The ATO is pushing to mandate **Financial Institution Details (FID)** for agent-lodged returns in Tax Time 2026 to phase out cheques – vital compliance change for practitioners.
By NomadicTax Research Team • 5-8 min read • April 19, 2026
## What’s Changing with Refunds and Agent Lodgments?
As of **Tax Time 2026**, the Australian Taxation Office will begin **mandating the provision of Financial Institution Details (FID)** for agent-lodged Individual Income Tax Returns (IITR) and Fringe Benefits Tax (FBT) forms. This shift is part of a broader initiative to eliminate **refunds paid by cheque**, aligning with declining Australia Post reliability and fewer financial institutions handling cheques. ([softwaredevelopers.ato.gov.au](https://softwaredevelopers.ato.gov.au/sites/default/files/2025-07/PLS_working_group_Key_Outcomes_1_July_2025.pdf?utm_source=openai))
## Why This Matters for Tax Agents & Practitioners
- Refunds that used to be issued by cheque will **no longer be allowed** without valid FID.
- This change improves efficiency for both ATO processing and taxpayers receiving refunds.
- Agents must ensure that clients provide accurate bank account information when lodging returns.
## Key Compliance Steps
1. **Collect Valid Bank Data**: Ensure you have the correct bank name, BSB, and account-number details prior to lodging via agent. Double-check accuracy to prevent rejected refunds.
2. **Update Systems & Processes**: Incorporate FID collection into your client intake workflows. Automate checks if possible.
3. **Communicate to Clients**: Inform clients facing refunds that cheque payments are being phased out unless they provide valid FID.
4. **Train Staff & Subcontractors**: Everyone lodging returns must know this requirement. Forms submitted without valid FID under agent lodgment may lead to **delayed or withheld refunds**.
## Practical Example
A tax agent preparing 200 IITR agent lodgments in July 2026 should:
- Send emails/texts or forms ahead of time requesting bank details for refunds.
- Check client data for accuracy—typo mistakes in bank account numbers can cause refunds to get lost or delayed.
- Update accounting software to include validation for FID before submission.
## What Happens If FID Isn't Provided?
- The agent-lodged return may still be processed, but **refund by cheque will not be issued**; instead, refund may be withheld until FID is supplied.
- Clients who previously relied on cheque refunds must adapt or risk cash-flow delays.
## Actionable Timeline
- **Now**: Include FID collection in onboarding of new clients and review existing clients expected to lodge with refunds.
- **Before July 2026**: Test your submission tools to ensure support for FID.
- **Tax Time 2026**: Compliance is mandatory; prepare for heightened client engagement and verification.
By acting early, agents will ensure a smoother transition, faster refunds, and fewer compliance hiccups.