Tax tech misalignment raises risk for UK organisations

UK organisations are reporting higher compliance risk and weaker returns from tax technology projects as IT and tax teams remain misaligned, according to research from Vertex.

A survey of finance and IT directors found that tax is becoming more data-intensive and increasingly dependent on integrated systems, but collaboration structures have not kept pace. Respondents linked the gap to slower decision-making, greater compliance exposure and wasted spending.

One in four organisations said IT does not fully understand the tax function's technology needs. While most respondents expect closer collaboration across IT, finance and tax, few organisations have set up formal cross-functional teams.

Collaboration gap

The results point to a mismatch between organisations' stated direction and current practice. Some 90% of respondents expect IT, finance and tax to collaborate more closely, but only 27% said formal cross-functional teams are already in place.

Without a defined operating model, IT is often brought in late on tax projects. That can create problems as tax requirements are embedded into enterprise systems, data pipelines and business applications.

Tax departments increasingly rely on software platforms and integration work, alongside governance for data quality, security, auditability and change management-areas that often sit within IT or require IT oversight.

Respondents reported several impacts from the lack of early alignment. More than a third (36%) said misalignment reduced agility or slowed decision-making. Nearly a third (30%) reported increased compliance risk, while 26% reported wasted spend or weak returns on tax technology investments.

Compliance pressure

The findings come as governments increase digital reporting requirements and scrutiny of transaction-level data. The UK is moving toward mandatory e-invoicing by 2029, while other jurisdictions adopt real-time reporting models and expand electronic audit programmes.

These trends increase the need for consistent data flows and reliable system integrations, shifting compliance from periodic reporting to more continuous obligations. As a result, tax teams have less scope to rely on manual workarounds or after-the-fact reconciliations.

In that context, gaps between IT and tax can become operational risk. Changes to finance systems, enterprise resource planning platforms and billing tools can alter tax outcomes, while unclear ownership can slow system updates when rules change.

Vertex described the findings as a structural issue across organisations, rather than a problem limited to specific tools or implementations.

"When organisations report increased compliance risk and wasted technology spend, it's a structural issue. Businesses that bring IT and Tax together early, with shared accountability, are far better positioned to manage regulatory change and unlock value from automation. Without early alignment between IT and Tax, organisations risk turning digital transformation initiatives into compliance challenges and underperforming technology investments," said Sal Visca, Chief Technology Officer at Vertex.

Investment outcomes

The reported link between collaboration issues and weaker returns is likely to resonate with finance leaders reviewing technology budgets. Tax technology projects often span multiple functions, including finance operations, procurement, sales systems and IT architecture. The survey suggests unclear ownership and late engagement can result in spending that does not match user needs or regulatory requirements.

Misalignment can also emerge after deployment. As tax rules change, companies need processes to update logic, monitor exceptions and validate outputs-work that requires coordination between tax specialists and technical teams.

Respondents broadly agreed that current ways of working need improvement. No one selected the option indicating that nothing needed to change to improve collaboration.

Survey details

Censuswide surveyed 250 finance and IT directors at companies with more than US$100 million in revenue. Respondents were aged 25 and over, and data was collected between late January and early February 2026.

Vertex provides software focused on indirect tax compliance, including sales and use tax and value added tax. Visca said organisations are reassessing how they structure IT and tax work as digital reporting requirements expand and e-invoicing becomes a policy priority.