New Enterprise Allowance scheme - My story

seeke wrote: »

@boh5

I think the scheme is only suitable for businesses with very low start-up costs. My business idea can be run from a bedroom, and has very low capital costs. In my case, the scheme is ideal. If I combine NEA, WTC and HB together I'm a little better off than I would be on JSA. Plus if the business turns a profit, I get to keep that. So the schemes a great idea for certain types of business. It's also terrific for those people who were going to set up a business anyway.

Having said all this, I'm having difficulty with the mechanics of how to access NEA. My local jobcentre seem to have no idea themselves who provides the mentoring/loans/business plan review. They don't know who runs the scheme basically. This is bizarre:eek:. Anyone else experienced this? Anyone know what I could do about this? The DWP/DirectGov sites give very little information.

Note all your income will be taxed and only the allowance payments are disregarded from benefit calculations. WTC and HB will be affected by your income if I am not mistaken.

The scheme appears to be poorly designed... not only is it branded a "scam" by many, only a selected few from each jobcentre every month can access it. Why? It is more expensive than the £400 Work Programme attachment fee and advisers havent been told about it.

My business has very low start up costs just printer ink and paper really but i have no idea how quickly i will get paying customers so am extremely cautious.

The "advisors" at the jobcentre have been of very little use and ive received misleading information regards the NEA several times now. 1st it was not running, 2nd it was full and finally it was suspended !
Confused ? i am
Then they mislead me about how the "allowance" worked that it sounded like you received £65 a week on top of JSA which it isnt.
When i asked about the business mentor they had no idea who or where it was. No travel costs if your mentor is 30 miles away...

My last meeting with them was that "a guy" is coming to the jobcentre next week to brief them on the NEA. There is so much confusion over this and it seems very badly organised i would be very worried about signing off to join NEA.

As far as the loan goes after you have been accepted to NEA then you can apply for the loan which is from a high street bank.

seeke wrote: »

@boh5

I think the scheme is only suitable for businesses with very low start-up costs. My business idea can be run from a bedroom, and has very low capital costs. In my case, the scheme is ideal. If I combine NEA, WTC and HB together I'm a little better off than I would be on JSA. Plus if the business turns a profit, I get to keep that. So the schemes a great idea for certain types of business. It's also terrific for those people who were going to set up a business anyway.

Having said all this, I'm having difficulty with the mechanics of how to access NEA. My local jobcentre seem to have no idea themselves who provides the mentoring/loans/business plan review. They don't know who runs the scheme basically. This is bizarre:eek:. Anyone else experienced this? Anyone know what I could do about this? The DWP/DirectGov sites give very little information.

@bofh5

In my area,and maybe in yours too, the scheme has only just been rolled out. It's obvious that in my local jobcentre, that there's almost no understanding or information about the NEA scheme. It like head office at DWP have created the scheme,but then neglected to tell their staff at branch level anything about it. I'm hoping that it's just a teething issue.

they mislead me about how the "allowance" worked that it sounded like you received £65 a week on top of JSA which it isnt.

Well,to be fair,they can't pay this allowance on top of JSA. The whole point is to get you off JSA. However, you are entitled to WTC. If you bundle together WTC and NEA you should be better off than you were on JSA. Once the NEA has finished paying, after 6 months, you will be worse off if your business isn't making any money. According to my (very rough) calculations, I think the business needs to be making about £25 a week in order to maintain your life at a JSA level of income,allwing for the fact that you would still be eligible for HB and WTC. But I'm planning/hoping that my business will make more money than that anyway. Honestly, I think the scheme is a good one for any business that's inexpensive to set-up.

The only problem I have with it is...no-one seems to know much about it at my local Jobcentre!

@bath gooner

I like your idea of asking at reception about seeing the NEA specialist. I'm gonna try that. Haven't got high hopes tho'

@WPN

I took it as read that any income would be taxed. I would love to be in the position of having to pay tax! Re benefits...My understanding...and I may be wrong, is that HB is directly and immediately affected by any rise in income above a certain threshold. But WTC appears to be paid for the entire current financial year based upon your income in the previous year,at least for the self-employed. I believe that it's just too complex for HMRC to do it any other way. Anyway,if anyone can either correct or corroborate this I would be grateful. AFAIK, these benefits are taxable. But you would have to make money from the business to trip the threshold.

Had my first meeting with business mentor, luckily he was the owner of the mentor company and acting as a volunteer mentor as they were short so he gave me loads of great advice on how I should adjust my business plan to get it accepted.
Another meeting in two weeks for loan application with a view to be up and running in November.
As I'm signing off once the loan arrives you also get the standard £250 signing off fee and 4 weeks Housing Benefit and Council Benefit free on top of Working Tax Credits. I already have work in the pipeline (yes, of course that will be means tested and tax deductable) but at the moment it does feel like the scheme is a helping hand for me but obviously it will not be for everyone.
Good Luck to anyone aiming to use it.

Truegho wrote: »

I too am interested in starting my own business (which will probably an online shop) and would love to put in for the New Ent. Allowance. When you start trading, do they still pay you an allowance up to six months, on top of your WTC?

Yes, the NEA allowance is "disregarded" in all claims for WTC, HB & CT.