Do I have to pay the Data Protection Fee if I am thinking about closing down my business to start something new?
The data protection fee is a fee paid to the Information Commissioner's Office, the UK’s data protection regulator, of £35 per year for small businesses if paid by direct debit or £40 if not.
If you are part of a certain industry sector, then you have to pay the data protection fee, regardless of your data processing activities. These include training, marketing services, accountancy, legal services, consultancy and advisory services, and more.
However, if you are not part of one of the prescribed sectors, and you only process personal data for the following purposes, you are exempt from paying the fee:
- staff administration such as payroll;
- marketing and advertising your own business; and
- your own accounting
The link to check whether you need to pay the fee is https://ico.org.uk/for-organisations/data-protection-fee/self-assessment/
As for winding down your current business and starting a new one, if you need to retain personal data, e.g. your insurance requires you to do so, or you want to retain it in case of any legal challenge (which could be up to 6 years after the breach of contract, for example), this would still be processing personal data and hence you would need to pay the data protection fee in relation to that business even if you are no longer trading but merely storing personal data relating to that business.
© Suzanne Dibble 2013-2023
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