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Under UK GDPR you are legally required to provide individuals with a privacy notice explaining how you collect, use and store their personal data. A privacy policy on your website is the standard way to fulfil this obligation.
You need a privacy policy if you collect any personal data through your website — including names, email addresses, IP addresses (collected automatically via analytics) or payment details. Almost every business website collects some personal data.
Most businesses that process personal data must pay an annual fee to the Information Commissioner's Office (ICO). Fees range from £40 to £2,900 depending on organisation size. Check if you need to register at ico.org.uk/registration.
Review your privacy policy at least annually and update it whenever you change how you process personal data — for example if you start using a new third-party service, add a contact form, or begin collecting new types of data.