If you run a small UK business with a physical premises — a workshop, a small warehouse, a retail back-room, a rented unit on an industrial estate, a coffee roastery with a mezzanine, a furniture restorer with three quarters of a unit you grew into and now only use one quarter of — you're paying rent on space that's sitting empty. Most UK SMEs with 200+ sq ft of premises overpay for space by 25-40% because their fit-out, growth plan, or seasonality means a big chunk is dormant for 6-9 months a year. The rent doesn't move; the rates don't move; the heating and lighting don't move; the fixed insurance premium doesn't move.
Listed on Packhood as storage, that 100-250 sq ft of dead corner is worth £250-£600/month depending on the area. Identity-checked renter, fixed monthly fee, 4-month minimum commitment, no person resident in the unit, no impact on your day operations. The income is recovered profit on space the business is already paying for.
Below: the SME-specific maths in plain English, why this is structurally different from a sublease (no formal sub-tenancy created), the business-rates and VAT angle, and how a typical small business sets this up alongside its existing operations without it eating any operational time.
The SME maths: how much dead space your premises actually has
Walk your unit honestly. Most SMEs find 20-40% of leased footage falls into one of these categories:
(1) Mezzanine that holds three filing cabinets and a Christmas tree. Often 80-200 sq ft. Currently storing nothing of business value. Storage potential: high.
(2) The far end of the workshop / warehouse you grew out of. Often 100-300 sq ft. Currently a graveyard of old packaging, broken pallets, the previous owner's leftovers. Storage potential: very high.
(3) Seasonal-only space. Coffee roastery's bagging area used 4 months a year; landscaper's outdoor secure compound used April-October only. Storage potential: high in the off-season.
(4) The retail back-room / staff area / "we'll grow into it" zone. Often 50-150 sq ft. Currently storing nothing of business value. Storage potential: medium-high.
Pricing for SME-owned storage space on Packhood — distinct from the residential garage market — runs:
Industrial-estate unit (B1/B2/B8 use class): £200-£400/month per 100 sq ft of clean, dry, lockable space. Higher in London (£350-£600/100 sq ft); lower in Sheffield, Hull, Stoke (£170-£280/100 sq ft).
Retail back-room with separate access: £150-£300/100 sq ft. Lower because retail back-rooms often have access constraints (renter has to come during business hours).
Self-contained mezzanine with dedicated ladder/staircase: £130-£250/100 sq ft.
Real-world: a typical 200 sq ft dead corner of a small warehouse earns £400-£800/month. £4,800-£9,600/year. That's the difference between an SME being marginally profitable and clearly profitable on the same operations.
Why this is structurally different from a sublease
Two questions every SME landlord-tenant arrangement triggers. The honest answers:
"My commercial lease prohibits subletting. Will Packhood breach that clause?" Almost certainly not. Storage hosting is a licence to use a defined space for storing the agreed items — the renter doesn't occupy the unit, doesn't have exclusive possession, and isn't running a business from it. Most commercial leases distinguish between a sublease (formal sub-tenancy with rights of occupation) and a licence (right to use space). Storage hosting falls clearly in the latter category. Read your specific lease. The "no subletting" clause typically permits storage by third parties under licence; the "no shared occupation" clause is the one that occasionally bites. If your lease has explicit shared-occupation prohibitions, talk to your landlord before listing — most are fine with it because the arrangement doesn't change the use class or the rent they receive.
"Will my use class change?" No. Storage of third-party items in your existing premises is incidental to your principal use — it's not a change of use under the Town and Country Planning (Use Classes) Order 1987 (as amended). You still occupy the premises for your business; the storage is a sideline. This is different from running a self-storage business as your principal use, which would require Class B8 planning and is a regulatory rabbit hole. Storage hosting at the SME-sideline level avoids all of this.
"Will my buildings + business insurance care?" Tell the insurer in writing. Most policies handle this without a premium change because the third-party items aren't being processed, manufactured, or sold from your premises — they're being stored, dormant, by people who aren't on your premises during operating hours. The insurer's main worry (cooking, sleeping, manufacturing) doesn't apply. The change is usually a no-cost endorsement. Get it in writing.
The business-rates and VAT angle, in 90 seconds
Business rates: the SVA hereditament you already pay rates on doesn't change. You're not creating a separate hereditament for the storage area; it remains part of your principal occupation. Storage hosting income doesn't trigger a rates revaluation in 99% of cases. Unless you formally separate the space (build a permanent partition with its own lockable door and dedicated services), the rates assessment stays as-is.
Small Business Rates Relief: if you're claiming SBRR (rateable value under £15,000), storage hosting income doesn't disqualify you. SBRR is granted on the basis of your hereditament's rateable value, not your turnover.
VAT: if your business is VAT-registered, storage income is subject to VAT at 20% (it's a supply of services, not a property let — peer-to-peer storage doesn't qualify for the property-let VAT exemption). You charge VAT on the storage rental, the renter pays VAT, you account for it on your normal VAT return. The platform handles the VAT-friendly invoicing.
If your business is NOT VAT-registered: the storage income counts toward your VAT-registration threshold (£90,000 turnover in 2026). For most SMEs running a small storage line on top of their main business, this is a non-issue — but if you're close to the VAT threshold for other reasons, the additional storage turnover could push you over. Talk to your accountant if you're within £10k of the threshold.
A worked example: small workshop in Sheffield
A furniture restorer leases a 1,200 sq ft unit on the Wadsley Bridge industrial estate at £8/sq ft/year (£800/month + ~£4/sq ft business rates with 50% SBRR = £200/month rates). Total monthly cost: £1,000.
He uses about 700 sq ft for active workshop space. The remaining 500 sq ft is split: 200 sq ft of mezzanine he never uses, 200 sq ft of dead workshop corner, 100 sq ft of cluttered "going to get to it" pile.
Listed: 200 sq ft of mezzanine at £280/month + 200 sq ft of dead corner at £350/month. Combined £630/month. Annual: £7,560.
His existing fixed costs (£12,000/yr) are now offset by £7,560/yr of storage income. Net premises cost is reduced from £12,000 to £4,440 — a 63% reduction in his single biggest fixed line. The business went from "thin margins, occasional bad month" to "comfortable margins year-round" without changing a thing about the day operations.
Operational reality: how to run this alongside your business
The pattern that works for most SMEs:
Physical separation: the storage area should have a defined boundary (even if just a painted line on the floor and a chained-off zone). The renter knows exactly where their stuff goes and exactly where they don't.
Access mechanism: a smart-lock or coded keysafe on a side or rear door lets the renter come outside your operating hours. Most SME-storage hosts find renters self-organise around weekends or evenings — they don't want to interrupt your operations either.
Insurance separation: the renter's items are their responsibility (Packhood Host Guarantee covers eligible incidents). Your buildings insurance protects the building; their contents-of-storage insurance (often included in the platform's terms or available add-on) protects their items.
Time cost per booking: 15-30 minutes of host involvement total across a typical 4-6 month booking — initial photos / listing setup, then unlock/lock at move-in and move-out. After the initial setup, it's roughly the same time investment as collecting the post.
How to start
Open the listing form. Five photos of the dead space (one wide of the empty area lit, two corners, the access door, the route a renter would take from the street). Three sentences: "Dry storage area in [postcode], 200 sq ft, ground-floor or mezzanine access, available [hours] [days]. No business activity in the space; storage of dry/non-perishable items only." Set the price 5% below the local commercial-storage median (or call a local self-storage facility for a 35-sq-ft unit's price and price your space proportionally).
Stripe Identity verification (2 mins). Listing live within 24 hours. Most SME storage spaces book in 2-4 weeks; first cheque hits 4-6 weeks after listing.
The take
Most UK SMEs are running on tighter premises margins than they realise because their lease covers space they're not actually using. Storage hosting on the dead 20-40% of footage is the most direct way to convert a fixed cost into a revenue stream — and it doesn't change your principal use, doesn't trigger rates issues, doesn't breach standard lease covenants.
It's not life-changing money for a £1m-revenue business. It's recoverable profit of £3,000-£10,000/year on space the business already pays for. For most small businesses, that's the difference between marginal and comfortable.
List the dead corner. Twenty minutes. The cheque is automatic by month two.