Data Protection Fees for New Businesses Explained

GDPR fees
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When starting a business of any type, there are always going to be fees involved. More if you set up a Limited Company or have any Company Formation done.  

Limited Companies will be required to register with Companies House. Every business ‘may’ be required to register with the ICO and pay a fee every year to maintain registration.  

Even if you start a business as a sole trader, you may be required to register your details with the Information Commissioner’s Office.  

This is a requirement for compliance with GDPR (General Data Protection Regulations).  

How much are the Data Protection Fees?   

Fees are based on the size of your business and will fall within one of three tiers.  

  • Microbusinesses with a turnover of up to £632,000 and fewer than 10 employees cost £40.  
  • Small to medium sized businesses with a turnover of up to £36 million and fewer than 250 employees cost £60.  
  • Corporations with either over 250 employees or a turnover above £36 million falls into tier 3 costing £2,900 annually.  

The vast majority of UK businesses fall into tier one or tier two. The data protection fee that gets paid to the ICO is £40 for new businesses. Every business is required to pay it. It is the law and the rates are set by parliament. Not the ICO.  

The fee can be reduced by £5 by setting up a Direct Debit. This is handy because it will auto-renew saving you having to remember to pay every year or receive a reminder letter with 14 days’ notice to pay up. When first registering a new business, have your business bank account details to hand so you can set up a Direct Debit for £35 on the first year’s fee.  

What happens if you fail to register?  

Operating a business that processes personal data without registering with the ICO is a breach of the regulations. This can result in a fine upwards of £400 with the max capped at 150% of the top tier fee bringing the maximum fine possible up to £4,350. A heavy sting for most businesses.  

The Information Commissioner’s Office is responsible for overseeing compliance with data processing regulations. Once your business is registered, your company details are maintained on the Register of Fee Payers. This will include your business name and address. For those operating from a home-based business who do not want their personal details included on the ICO public database, you can provide an alternative address such as a mailing address or PO box.  

Exemptions to the ICO Registration Fees 

There are a few exemptions to the data protection fee…  

The list of exemptions includes 

  • Staff administration 
  • Advertising, marketing and public relations 
  • Accounts and records 
  • Not-for-profit purposes 
  • Personal, family or household affairs 
  • Maintaining a public register 
  • Judicial functions 
  • Processing personal information without an automated system such as a computer 
  • Since 1 April 2019, members of the House of Lords, elected representatives and prospective representatives are also exempt 

 The vast majority of businesses will use personal data in part for “advertising, marketing, and public relation”. It is hard to imagine in today’s tech-forward world that any business would be handling any records without a computer.  

If you are unsure if you have to register and pay the fee to the ICO, there is a self-assessment you can take on the ICO website that will inform you of whether you need to register your business or if you are exempt.  

https://ico.org.uk/for-organisations/guide-to-data-protection/guide-to-the-general-data-protection-regulation-gdpr/data-protection-fee/exemptions/ 

Since the introduction of the GDPR in 2018, a new business start-up in the UK now requires registering your details with the ICO, HMRC, and depending on how you structure the business, you may be required to register with Companies House too.  

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