Industry sector: Retail and wholesale

Ebay trader: Rent

The great advantage of many eBay businesses is that they can be run from home, keeping costs low. However, like other businesses, extra space may be needed for storing large amounts of stock or for doing special work like cleaning, restoration and repairs. It may also be the case that you intend to trade on eBay as well as having a traditional shop outlet.

Working from home

If you run your eBay business from home you may be able to agree with HM Revenue & Customs (HMRC) that a certain proportion of the domestic rent/mortgage interest payments is treated as a business expense and set against your earnings. Talk to your accountant, who will be able to advise you whether or not you are able to claim and the percentage of the total monthly cost of your rent/mortgage that would be reasonable to treat as a business expense.

If you enter the proportion of the business rent/mortgage interest here in your cash flow forecast remember to include only the balance of your domestic rent/mortgage payments when calculating how much you will have to take in drawings to cover your living expenses.

Alternatively you can claim a flat rate monthly allowance which varies depending on how many hours business use of your home there is in each month. Note that the flat rate allowance covers all the property related expenses of running your business from home - you can't claim separately for things like utility bills. There is also a flat rate mileage allowance you can claim for business use of your motor vehicle.

Be sure to notify your household insurer to make sure that you are properly covered.

Business premises

If you are going to have any business premises you should enter in your cash flow forecast the amount of rent you will pay in the months that you will have to pay it.

Your solicitor will help you with the lease agreement but make sure that you are clear about:

  • whether the premises can be used for the purposes you have in mind
  • how frequently the rent will be reviewed
  • how long the lease runs for
  • what you and the landlord are each responsible for
  • the position as regards sub-letting

Bear in mind that premises which are open to the public should be accessible to customers who are disabled.