Your tech stack is your risk surface: how to assess vendors without becoming a security specialist

In the age of AI, vendor risk has moved to the centre of strategic tax discussions. As external tools play a greater role in tax operations, questions about data exposure, compliance, and control are increasingly surfacing in audit reviews and board papers. Tolley’s latest report shows that UK tax teams are embracing new technologies yet remain unprepared for the cybersecurity and compliance implications of digital infrastructure and third-party tools.

This blog explains why third-party risk matters to UK in-house tax professionals and sets out practical ways to assess and manage data exposure.

Risks for in-house tax teams

Compromising on external vendors can have significant effects on an in-house tax team’s work. When a service provider is breached, the immediate impact may be:

1. Confidential data exposure: A vendor breach can expose client information or internal tax data processed through that service, with consequences under UK GDPR and internal confidentiality obligations.
2. Operational setbacks: If a critical tool fails or is rendered unavailable by an incident, tax deadlines and reporting processes can be disrupted, creating knock-on effects for compliance.
3. Regulatory and audit questions: Both internal auditors and regulators increasingly expect evidence of vendor risk management as part of broader governance practices.

These risks are real and increasing. Poorly protected suppliers or service partners have been a factor in a range of high-profile breaches, and UK guidance emphasises that organisations should review the security of third-party products before and after adoption.

A Practical Approach to Vendor Assessment

You do not need to be a cybersecurity professional to engage in vendor assessment; all you need is a structured process that aligns organisational governance with consistent decision-making.

1. Define risk expectations before you engage

Before onboarding an external vendor, clarify what specific data the service will access and what compliance standards it must meet. Drawing up a simple set of questions based on UK data protection and security practices can help identify which services need deeper review and which are lower risk.

2. Ask for evidence of security practices

Review and record the security processes vendors already have in place. The UK government’s guidance on managing third-party product security stresses that organisations should seek documentation on controls, data storage and protection, and how vulnerabilities are handled. This put the onus on the supplier to articulate their approach in clear terms.

For example, Tolley offers trusted tax research and workflow tools, designed with enterprise-grade security to give users added peace of mind.

I want to learn how Tolley+ Research can help me streamline tax research

I want to understand how Tolley+ Guidance can help me apply tax legislation with confidence

3. Agree roles, responsibilities and access limits

Where vendors will have access to internal systems or data, agree on limits that reflect your risk tolerance. Minimising access is not only a technical exercise; it helps contain exposure should an incident occur. Agreements should also specify what information vendors must share when security concerns arise and what remediation steps they will take.

4. Monitor and review over time

Risk is not static. What was acceptable at the start of a relationship may not remain so if threats evolve or internal needs change. Scheduling periodic reassessment helps ensure that oversight continues beyond the point of procurement.

5. Integrate vendor risk with wider tax governance

Vendor risk should be part of your broader governance routines, not an isolated task. In-house tax leaders who build connections with compliance, legal and IT colleagues can bring external risk considerations into internal reporting and audit discussions. Shared understanding across functions also supports accountability when questions arise from senior management or regulators.

Where this fits into tax team practice

Effective vendor assessment processes provide two benefits for tax leaders. First, they reduce the chance that a supplier weakness becomes your team’s problem. Second, they equip you to explain your decisions and controls when others ask for evidence of how risk is managed.

Practices such as reviewing vendor security documentation, limiting data access, and revisiting risk assessments regularly are the building blocks of more rigorous governance. They also align with UK guidance on third-party product security, which encourages organisations to produce and maintain documentation about vendor risk and controls.

To understand how leading UK tax teams are integrating cybersecurity into their technology and governance decisions, read the full Tolley report, Securing trust: Cybersecurity in the age of tax tech.