New Enterprise Allowance scheme - My story

Truegho

There is also the matter of how I would prove to HMRC how much time I am spending on my websites. It could be 30hrs pwk, it could be more or less, depending on the niches I eventually opt to start.

How much better off would I be if I DID start my own business, as opposed to staying on the dole?

Truegho wrote: »

So would you recommend I do take the step and tell my employment advisor that I want to sign off the dole and start my own business?

I am 50, been signing on now since March, cannot get a job anywhere (despite numerous applications that have not even been answered!), and know how to set up websites. I am currently on the standard JSA rate for my circumstances.

As I say, my only worry was the time between signing off and registering with HMRC, in that I don't want to be left without money while my claim for WTC is sorted out.

jamespir

im looking into this cause i want to set up own business but to do that ill have to go full time and give up my part time work

how does the loan work etc

BathGooner

Truegho wrote: »

So would you recommend I do take the step and tell my employment advisor that I want to sign off the dole and start my own business?

I am 50, been signing on now since March, cannot get a job anywhere (despite numerous applications that have not even been answered!), and know how to set up websites. I am currently on the standard JSA rate for my circumstances.

As I say, my only worry was the time between signing off and registering with HMRC, in that I don't want to be left without money while my claim for WTC is sorted out.

To be eligible for the scheme you have to be on the rock n roll for 6 months so you're fine for that. Don't worry about being out of pocket as you don't have to sign off until you're ready (ie the loans in the bank) and when you sign off you automatically get £250 for signing off and the NEA allowance should be in your bank straight away.
Registering with HMRC wont affect your claim/money (until next year when they send you an invoice!)
Go for it! It's designed for (very) small businesses with little or no overheads.
If the worst came to the worst you could sign on again in 6 months!

roguedesigner

You can't even begin the application for the loan until you have signed off JSA. Who was responsible for that bright idea I cannot imagine, surely the sensible thing would be to allow you to apply and be accepted in priniciple before signing off JSA. Some people will be sunk if their loan application is rejected, but under this nonsensical system they won't find that out until they are committed. If the government are serious about creating an enterprise culture, they should put their money where their mouth is and guarantee to underwrite the loan component of the funding; after all, the more people who successfully start their own business, the more they ultimately stand to gain.

You need to sign a de minimus statement to the effect that the maximum financial assistance you will receive under the NEA will not mean that you have received more than €200,000 in assistance over the last three financial years (!), and provide photo ID (passport, driving license, CIS card etc), proof of your address, bank statements as proof of income (?), and proof of your NI number (P60 or DWP letter). You also have to provide evidence of any other financial liabilities such as loans or credit agreements you may have.

In the first year you have the option of repaying only the interest, and in the second and third years you repay the interest and the capital which works out to around £32 a month on a loan of £1000.

Once your application is in, it takes five working days for it to be accepted.

BathGooner

roguedesigner wrote: »

You can't even begin the application for the loan until you have signed off JSA. Who was responsible for that bright idea I cannot imagine, surely the sensible thing would be to allow you to apply and be accepted in priniciple before signing off JSA.

This is certainly not the case with me. My mentor is sorting out the paperwork and helping me with the 'correct' answers so the the loan has been approved BEFORE I have to sign off.
This is being done now with the aim of funding being received at the end of this month (Oct) ready to sign off and commence trading in November.

roguedesigner

You can put your referral documentation in before signing off, but I was quite explicitly told that they will not begin processing your application until I had signed off JSA. Whether this is misinterpretation of the rules or not, and given the wide disparity between different regions in how this scheme is being handled that wouldn't surprise me, but this is what the Coventry and Warwickshire Reinvestment Trust has to say about it;

• The Loan provider will need to check with Job Centre Plus whether the NEA participant is no longer receiving JSA or has not returned to benefit.
• The loan cannot be made if customer is still signing on – the loan provider will check this with JCP, at the end of the loan process, before advancing any funds.

There is also a minimum wait of ten working days for the commencement of NEA allowance payments (again, this is what I was told and in fact it took longer than that), so you might want to time your signing off date carefully.

BathGooner

I went into my first meeting with my mentor with the loan concerns I'd read about as my primary worry regarding the NEA. He reassured me that the loan will be in place (within 5 days) of application and you will not need to sign off until the loan is in the bank. However, the NEA allowance will not be paid until you have signed off.
I am being dealt with via Gloucester Enterprise and, as the previous poster mentioned, perhaps different districts deal slightly different to others.

patman99

This seams to be yet another mess-up by the JC+. You would think that with such an important scheme they would have crossed the 't's and dotted the I's before rolling it out.

One question though, Can you use the money to register a Limited company and place yourself as the Director/sole employee ?. This would then reduce the tax bill somewhat.

Also, @bofh, have you thought about using a laser printer to print your stationary?. Much cheaper over-all than an inkjet.

What about sending potential clients a brochure in 'PDF' via email ?. My bro' works for a niche company who where up until last year, sending-out 500-page printed cataluoges to their 5,000+ clients. Now, they send them a pdf version instead.

BathGooner

patman99 wrote: »

.

One question though, Can you use the money to register a Limited company and place yourself as the Director/sole employee ?. This would then reduce the tax bill somewhat.
.

Works for me.

Truegho

But do you have to have an impeccable credit history before they will give you the loan? I mean, if you are under a payment scheme, via the CAB, with all your creditors, wouldn't that count against you?

BathGooner wrote: »

I went into my first meeting with my mentor with the loan concerns I'd read about as my primary worry regarding the NEA. He reassured me that the loan will be in place (within 5 days) of application and you will not need to sign off until the loan is in the bank. However, the NEA allowance will not be paid until you have signed off.
I am being dealt with via Gloucester Enterprise and, as the previous poster mentioned, perhaps different districts deal slightly different to others.