New Enterprise Allowance scheme - My story

mattcanary

dktreesea wrote: »

I believe (absolutely no evidence to back this up) that most businesses make a profit from the first customer. And maybe most self employed people can take £5 and turn it into £20. I know I can. But £15 profit wouldn't even pay the rent on my premises for the day, let alone the rent for the house. So at that point I would still be working for the landlord. And the commercial one at that.

If you already have a home, are faced with trying to live on £71 a week, and can run your business from home with minimal overheads, then going on NEA, imho, would be a no brainer. NEA is £33 or therabouts, WTC the same, so all you are trying to outperform for the first 6 months is the £5 a week shortfall between that income and your current "don't compete in the workforce/stay out of the workforce" bribe.

Even turning £5 into £20 - it takes time. If that's all you need to do for the week to be ahead on your present income position AND you can do it within a week, then I would say go for it.

Are you of the view that if there are any benefits included in the income equation, then the business isn't self sufficient? Keep in mind people going into a business via the NEA are already likely to be on benefits. Don't you have to have been unemployed for a certain amount of time to qualify for NEA?

Even in a family business where both partners are working full time, you need a hell of a lot of profit before you're beyond the entitlement to benefits wall. I checked that for our neck of the woods and was surprised to find, even with a profit of £22k a year, a family could still be entitled to benefits of £150 a week.

I would caution people about turning down that kind of business subsidy, especially if your business has overheads.

If you are single and without children, the maximum WTC you can receive is around £54.00 per week, not £33 odd.
So you would be in fact be better off claiming NEA and WTC, ensuring you work at least 30 hours per week on your business.

tomterm8

mattcanary wrote: »

I believe HMRC ask for proof at random from a small percentage of total claims made.

I don't believe it's random; I believe they have a computer program mining tax data looking for obvious outliers or possible fradulent claims.

Stevenb

I don't believe it's random; I believe they have a computer program mining tax data looking for obvious outliers or possible fradulent claims.

My brother in law works in this field and they use simple but effective data matching programs to link possible claims where someone claims as a single person but are actually a couple, and they can also link your tax return info with your claim info to see any discrepancies such as hidden tax returns etc. but they TRUST people to claim the correct working hours and have little way of proving otherwise and with millions of claims each year they would have trouble to chase and prove multiple claims.

The moral of the story is DONT SCREW THE BENEFITS SYSTEM , its there to aid you not get mugged.

The sooner your businesses get moving the sooner you can stop claiming benefits and the country will be a better place. :beer:

tomterm8

Stevenb wrote: »

but they TRUST people to claim the correct working hours and have little way of proving otherwise and with millions of claims each year they would have trouble to chase and prove multiple claims.

Well... maybe.

But how hard is it to write something like this into a database query:

select People
From WTC.Claimants
Where WTC.Claimant.EmploymentType = SelfEmployed and ((AVG(WTC.Claimants.Salary) / AVG(WTC.Claimants.Hours)) <= £1)

Obviously psuedocode, but it's not hard to conceive of a similar basic approach which would look for people who might be taking the pee and audit them.

It's not even something they have to do now, or today. They could decide to do it at some random point in the future.

Stevenb

Why is this even being discussed, if your hiding nothing why argue about how they may catch someone.

Fill the form in correctly and honestly and who cares what they look into, if you have nothing to hide of course !!!

If they really want they can stack out your home and bug your telephone but that's a little OTT and WTC is hardly an FBI matter .

DONT LIE , DONT CHEAT , and you can relax , its not difficult.

tomterm8

Stevenb wrote: »

Why is this even being discussed, if your hiding nothing why argue about how they may catch someone.

Fill the form in correctly and honestly and who cares what they look into, if you have nothing to hide of course !!!

It's being discussed, Steven, because in the time I've been on this forum I've seen people who start self-employed businesses audited by working tax credit to check the hours they work are legitimate.

If you can't prove that you have worked those hours then they will ask you to pay the working tax credits back.

Note, this is the case even where you have been honest about the amount of hours worked. It's not enough to be honest.

It's essentially important to be able to prove the hours you work. You must keep this information available, and it's probably more relevant to people on NEA than others because most NEA businesses are started with low capital by inexperienced people who don't even know to keep the required proof. Most NEA businesses start off with low incomes. I've seen people audited in as little as three months.

Edit: A good first objective with any business is to get to the point you'd never qualify for JSA again. After that, to get to the point you're too rich for WTC. Those are both great goals. While you're still claiming any benefit it is very important to be able to show you fulfill the requirements of that benefit.

Stevenb

It's being discussed, Steven

Is that you mum ?????????

Cant be assed to argue , I don't get it because I earn to much and others are welcome to run there lives as they see fit, im honest and keep precise records, many don't.

You clearly have a bee in your bonnet so im of for some dinner, night all.

dktreesea

Surely the best way to prove the hours you have worked is to have the revenue and profits to back those hours up?

Our neighbour's son finished college a couple of years ago and except for a bit of zero hour contract work here and there, has been on the dole ever since. He got sick of being knocked back for work and set up as a gardener on the NEA scheme. He was audited by HMRC. I went over to help him out when they came. Not that he needed any help. His book keeping is better than mine. All his invoices (including the hours billed for) in one folder and a cash book showing the revenue, when the invoice was paid and when it was banked. It's true to say, he only has the lease on his van, which is dad guaranteed (oh, that we could all have such parents!) and the cost of running it, plus a few tools here and there for expenses. The guy wasn't even there for half an hour. Seemed happy with everything and a few days later the guy got a letter thanking him for his cooperation and confirming the HMRC was happy with his business and closing the audit.

I had said to him with his book keeping he need not worry, but I can understand why he was really anxious about it. I don't think the audit was about WTC though, because he doesn't qualify for it. Do you have to be over a certain age nowadays before you get WTC?

tomterm8

Stevenb wrote: »

Is that you mum ?????????

Cant be assed to argue , I don't get it because I earn to much and others are welcome to run there lives as they see fit, im honest and keep precise records, many don't.

You clearly have a bee in your bonnet so im of for some dinner, night all.

I wasn't rude to you, at least intentionally.

Really surprised at your reaction to be honest with you.

You're not the only person ever to have claimed NEA. Almost everyone I've met on the NEA scheme plans to start off by claiming working tax credit, work hard, and make enough money to get off working tax credit.

But they almost all start on it, and it takes most people time to improve their business.

tomterm8

dktreesea wrote: »

Surely the best way to prove the hours you have worked is to have the revenue and profits to back those hours up?

If you could in the first month or two of operations make enough money to support yourself why would you start up using the NEA scheme in the first place?

You can start a business on JSA at any time. The NEA scheme is pretty much designed for slow growing businesses.

You'd be far better off forgetting the NEA altogether in that scenario.

The time taken to deal with the bureaucracy of the NEA scheme would cost you money.

dktreesea wrote: »

I don't think the audit was about WTC though, because he doesn't qualify for it. Do you have to be over a certain age nowadays before you get WTC?

25 unless you have a child.