When Can You Share Personal Data With Third Parties Under GDPR?

If you run a small business, chances are you share personal data with other organisations more often than you realise.

Sending payroll details to your accountant. Giving a courier a customer’s address. Using a cloud CRM. Outsourcing IT support. Even introducing a customer to a partner business.

All of these can involve disclosing personal information to third parties - and if you get it wrong, you risk complaints, regulatory attention, and a loss of trust that’s hard to win back.

The good news is: GDPR doesn’t ban sharing personal data. It just expects you to do it lawfully, fairly and transparently, with the right safeguards in place.

Below, we’ll break down what “disclosure” means, when it’s allowed under UK GDPR and the Data Protection Act 2018, and the practical steps you can take to stay compliant as your business grows.

What Counts As “Disclosure Of Personal Information To Third Parties”?

In plain terms, a disclosure happens when your business shares personal data with someone else outside your organisation.

That “someone else” is the third party. Depending on the situation, they might be:

• A service provider you’ve hired (for example, payroll software, marketing platforms, IT support, cloud hosting)
• A professional adviser (accountant, solicitor, consultant)
• A partner business (a referral partner, a distributor, a joint event organiser)
• A regulator or public authority (HMRC, the police, local authorities)
• Another company in your group (if you have a holding company/subsidiary structure)

Personal information is any information relating to an identified or identifiable individual. Common examples for small businesses include:

• Names, email addresses, phone numbers
• Delivery addresses and billing details
• Customer order history
• Employee records and HR notes
• IP addresses and device identifiers (often captured by analytics tools)

Some data is special category data (like health data, biometric data, ethnicity, or religious beliefs) and attracts stricter legal requirements. If you’re sharing anything in that category, you’ll usually want tailored legal advice before you do it.

Disclosure Vs “Using” A Supplier

One common misconception is that you’re only “sharing” data if you email a spreadsheet to someone.

In reality, you can be disclosing data simply by letting another organisation access it (even automatically), for example:

• Customers enter their details into your website and those details are stored by your e-commerce platform
• You use a booking system that sends appointment reminders by SMS via a third party
• Your team stores client files in cloud storage managed by a hosting provider

That’s why GDPR compliance needs to be built into your everyday business systems - not treated as a one-off tick-box exercise.

When Is Disclosure Allowed Under UK GDPR?

Under UK GDPR, you can share personal data with a third party if (and only if) you have a lawful basis and you comply with the wider principles (like transparency, purpose limitation, and data minimisation).

Most small businesses rely on one (or more) of these lawful bases:

1) Contract (It’s Needed To Deliver What The Person Asked For)

This is one of the most practical bases for disclosure. If a customer orders goods from you, you’ll likely need to share their name and address with your courier.

Similarly, if you employ staff, you may need to share relevant employee information with payroll providers to pay them correctly.

Tip: “Contract” works best where the disclosure is genuinely necessary. If it’s optional or just “nice to have”, you might need a different basis.

2) Legal Obligation (The Law Requires You To Share It)

Sometimes you must share personal data because another law requires it, for example:

• Providing information to HMRC for tax purposes
• Responding to certain lawful requests from regulators
• Keeping statutory employment records

For employers, this often comes up when handling staff records. If you’re unsure what you can share (and with whom), it’s worth checking your workplace data sharing approach against your actual legal duties.

Note: This article is general information, not tax or accounting advice. If you’re unsure about your reporting obligations to HMRC, consider speaking with your accountant or tax adviser.

3) Legitimate Interests (A Reasonable Business Need, Balanced Against Privacy)

Legitimate interests can be a useful lawful basis when:

• You have a genuine business reason to share the data
• The sharing is proportionate and expected
• The individual’s rights and interests don’t override your interests

Common examples include fraud prevention, securing IT systems, or sharing limited customer info with a payment processor to validate transactions.

Important: Legitimate interests isn’t a “free pass”. For higher-risk or less obvious disclosures, it’s often sensible to document a Legitimate Interests Assessment (LIA) to show how you balanced your interests against the individual’s rights.

4) Consent (They Agree To It)

Consent can work in some situations - but for businesses, it’s often tricky because it must be:

• Freely given
• Specific and informed
• Unambiguous
• Easy to withdraw

If your operations depend on ongoing data sharing, consent may be risky (because the person can withdraw it at any time). This is why many businesses prefer contract, legal obligation or legitimate interests where appropriate.

5) Vital Interests / Public Task

These are less common for typical SMEs, but can apply in specific scenarios (for example, emergencies involving life-and-death situations, or organisations carrying out official functions).

Common Small Business Scenarios: Can You Share Personal Data Here?

Let’s make this practical. Here are situations where disclosure of personal information to third parties comes up all the time for small businesses - and what to watch out for.

Sharing Customer Data With Delivery Partners And Platforms

If you sell products, you’ll usually need to share delivery details with couriers and fulfilment partners. This is often justifiable on a “contract” basis.

To stay compliant, focus on:

• Data minimisation: share what the courier needs (usually name, address, contact number if necessary), not the whole customer profile
• Transparency: your customers should be told in your privacy information that you use delivery providers
• Supplier checks: make sure the courier/platform has appropriate security measures

Using Payroll, HR, Bookkeeping Or Outsourced Admin

As soon as you hire, you’ll be handling more sensitive data (bank details, addresses, possibly health information and absence records).

You’ll often share data with:

• Payroll providers
• Pension providers
• Accountants/bookkeepers
• HR consultants

Make sure staff understand what happens to their data and why. Your internal documents and contracts also matter here - for example, an Employment Contract and staff policies usually need to align with how your business actually handles and discloses employee personal information.

Passing Leads Or Making Referrals To Partner Businesses

This is an area where businesses accidentally “over-share”. If you refer a lead to a partner, you might be tempted to send their name, contact details, and background context.

Before you do, ask:

• Is the person expecting this referral?
• Have you told them you’ll share their details with partners?
• Do you need their consent, or can you rely on legitimate interests?

If the referral is marketing-driven, you also need to think about direct marketing rules (which sit alongside GDPR). It’s not just a “GDPR issue”.

Sharing Data With IT Support And Cloud Providers

If your IT provider can access your systems, they may be able to access personal data too. That’s still a disclosure (even if they never download anything).

This is where the controller/processor relationship matters (more on that below). In many cases, you’ll want a Data Processing Agreement in place with suppliers that handle personal data on your behalf.

Disclosures For CCTV, Security, And Workplace Monitoring

If you use CCTV or monitoring tools, you may be collecting personal data (images, audio, device identifiers, browsing activity) and sometimes sharing it with:

• Security providers
• Landlords/building management
• Insurers
• Police (when there’s an incident)

Because this can be high-impact for individuals, it’s important to have a clear compliance approach from the start. Even something like workplace cameras can create risk if you don’t set expectations properly and control access to footage.

Controller Vs Processor: Why It Matters Before You Share Anything

One of the most important compliance steps (and one of the most overlooked) is figuring out whether the third party is acting as your processor or another controller.

If The Third Party Is Your Processor

A processor is a service provider that processes personal data on your instructions (for example, your payroll software provider, your email marketing platform, or cloud hosting provider).

If you’re the controller and they’re the processor, UK GDPR expects you to:

• Use only processors that provide “sufficient guarantees” on security and compliance
• Have a written contract in place with required GDPR clauses (usually done through a Data Processing Agreement)
• Ensure they only use sub-processors appropriately and transparently

This is why contracts matter. If your supplier relationship involves personal data, a proper Data Processing Agreement isn’t just a nice add-on - it’s often a core compliance document.

If The Third Party Is Another Controller (Or A Joint Controller)

If you disclose personal information to another organisation that decides how and why the data will be used, they may be an independent controller (or sometimes a joint controller).

Examples might include:

• Sharing customer details with a finance provider that decides its own processing purposes
• Co-hosting an event with another business where you jointly decide how you’ll collect and use attendee data

In these cases, you’ll need to be clear (internally and in your privacy wording) about each party’s role, and ensure your disclosure is transparent and lawful.

How To Stay Compliant: A Practical Checklist For Businesses

If you want a strong compliance posture without overcomplicating things, use this as your baseline checklist. It covers what regulators and customers typically expect to see when your business is sharing personal data with third parties.

1) Map What You Share, With Whom, And Why

Start simple. Make a list of:

• What personal data you disclose (customer contact details, employee bank details, CCTV footage, etc.)
• Who you disclose it to (couriers, software providers, accountants, marketing agencies)
• Why you disclose it (delivery, payroll, fraud prevention, customer support)
• Your lawful basis (contract, legal obligation, legitimate interests, consent)

This helps you spot unnecessary disclosures quickly - and “don’t collect/share what you don’t need” is one of the easiest ways to reduce GDPR risk.

2) Update Your Privacy Information So It Matches Reality

If you’re disclosing data to third parties, your customers (and staff) should not be finding out by surprise.

At a minimum, your privacy information should explain:

• What data you collect
• What you use it for
• Who you share it with (usually by category, like “delivery providers” or “IT and cloud providers”)
• Any overseas transfers (if applicable)
• How long you keep it
• People’s rights and how to contact you

For many small businesses, this is done via a website Privacy Policy, plus internal privacy notices for staff where relevant.

3) Put The Right Contracts In Place With Suppliers

If a supplier processes personal data for you, you’ll usually need contractual terms that cover GDPR-required points like confidentiality, security, breach reporting, and return/deletion of data at the end of the contract.

This is often dealt with via a Data Processing Agreement. Depending on your setup, it may be a standalone document or built into a wider services agreement.

Be careful with “off the shelf” supplier terms. They may be heavily one-sided, unclear on responsibilities, or missing practical protections you actually need.

4) Only Share What’s Necessary (And Control Access Internally)

GDPR expects you to apply data minimisation and security measures. Practically, that means:

• Don’t share entire databases when a third party only needs a small dataset
• Limit who in your business can export or share personal data
• Use role-based access controls and strong authentication
• Keep an audit trail for sensitive disclosures

This isn’t just about cyber security - it’s also about preventing human error and “oops” moments that can become reportable incidents.

5) Have A Plan For Data Breaches And Misdirected Disclosures

Mistakes happen, especially when you’re busy and moving fast. A staff member emails a customer list to the wrong recipient. A supplier’s system is compromised. A laptop goes missing.

What matters is how you respond.

Having a Data Breach Response Plan helps you act quickly, preserve evidence, assess whether reporting is required, and communicate clearly with affected individuals where necessary.

6) Train Your Team (So Everyone Knows The Rules)

A lot of disclosure risk isn’t technical - it’s behavioural. People forward emails, share spreadsheets, or give information over the phone without verifying who they’re talking to.

Even light-touch training can help your team understand:

• What counts as personal data
• When disclosures are allowed
• How to spot suspicious requests (social engineering/phishing)
• Who to escalate questions to

7) Be Ready For Subject Access Requests (SARs)

If you share personal data with third parties, you may receive more complex requests from individuals asking for copies of their data and details about disclosures.

That’s why it’s helpful to have a consistent SAR process and know what you can (and can’t) withhold. This is especially relevant for employers and service businesses dealing with sensitive communications. You can reduce risk by aligning your process with your subject access request obligations.

Key Takeaways

• Disclosing personal information to third parties is common in day-to-day business, including couriers, accountants, IT providers, payroll platforms, and partner referrals.
• UK GDPR allows disclosure when you have a lawful basis (often contract, legal obligation, legitimate interests, or consent) and you comply with core data protection principles.
• Always identify whether the third party is a processor (acting on your instructions) or another controller (deciding how and why the data is used), because your obligations differ.
• A clear Privacy Policy and appropriate supplier contracts (often including a Data Processing Agreement) are practical building blocks for compliance.
• Minimise what you share, control access, and prepare for mistakes with a Data Breach Response Plan so you can respond quickly if something goes wrong.
• As your business grows, disclosures tend to increase - so it’s worth setting up compliant systems from day one rather than trying to retrofit later.

If you’d like help reviewing your data sharing practices, putting the right supplier terms in place, or updating your privacy documents, you can reach us at 08081347754 or team@sprintlaw.co.uk for a free, no-obligations chat.