New Enterprise Allowance scheme - My story

Andy2013

If you claim JSA then HB is given out generally automatically as they assume people need the help.

When you go onto NEA you stop your JSA claim and become self employed so you must tell the HB people this.

Different areas have different outcomes so its just best to ask them yourself as these forums have to many answers most of which would vary.

When you are self employed the HB will ask you for an estimate of earnings and then periodically assess you to see how much they will reduce it by .

Ultimately as your profits rise your HB will be reduced until you earn enough to pay the whole sum yourself.

Like I said when it comes to benefits everyone is a separate case so just contact them in person to see how it affects you.

And remember the HMRC , job centre and local authorities are all inter linked so one can see the others info and as NEA starts then JSA will be cancelled by the opposite side.

s450

I am still not sure what is the right answer to my question.

So, even if I earn only -let say as an example- 50 pounds per week during the early stages of my trading would the council subtract this 50 pounds from my 90 pounds benefit per week which would mean that I would get 40 pounds HB per week?

It is of course plausible, because compared with the period of JSA normally you do not earn anything at all per week.

But let's just concentrate on this only sentence which appears under the section Finance here:

https://www.gov.uk/new-enterprise-allowance

It reads:

Any money you get does not affect your Housing Benefit, tax credits or Income Tax.

Ok, I am not an English native speaker but how should this statement be interpreted?
I understand it as "you'll get your HB during the NEA scheme as usual independent on how much millions pounds you are able to earn with your trading"

Does anybody here understand it differently?
Regards

TrueBlue1965

NEA payments dont effect Housing Benefit, Working Tax credits or Child Tax credits. In effect, NEA payments are free money for 26 weeks.

What you earn from your business will effects your Housing Benefit. The more you earn. The less Housing Benefit you will get. Housing Benefit will be reduced as you earn more money from your business Once you earn £X. You will then recieve no Housing Benefit but you will be better off than before you started working for yourself..

If you need to know how much Housing Benefit you will get once you switch over to being self employed. You need to do a better off calculation and put in the amount of earnings in to the calculator to see how your Housing Benefit will be effected. Maybe, state that your earning £50p/w in one better off calcuation. Then, try doing another better off calculation where you earn £100p/w ect. By doing several different better off calculation. You will soon see how your Housing Benefit will be effected by how much your business earns.

Remember, the NEA payments are in effect free money. So, you dont need to state that you are getting NEA payments in your beter off calculation or when you make your claim for Housing Benefit.

pinkypoopydoo

I'M FREEEEEEEE!!

I've had my last compliance meeting with the job centre, and am now free!! The last two meetings were really quite stressful, with the job centre asking for more and more ridiculous forms of proof that I was trading (they asked to see examples of my work this week. I work as a bookkeeper, so deal with confidential financial records, and there is no way in hell I was sharing them with a nosy JC adviser) as money being paid into my account by clients (matching all the invoices that were provided for their perusal) and various business bills being paid out the account (matching all the receipts provided for checking too), wasn't enough rpoof.

All in all, quite stressful, but it's done, and I'm free to enjoy my final couple of weeks of NEA payments in peace, while I continue to build my business.

With hindsight, I wouldn't have gone down the NEA route - there wasn't enough benefit in my circumstances, although the first month of extra payments helped keep me afloat. I could have done this alone. Whether it would have reduced the amount of stress surrounding the last few months, or just introduced different stresses, I don;t know, but I do know that i am thrilled to be finally free of the job centre!!

Andy2013

Yeah TrueBlue1965 is correct in that NEA payments are not an issue in whether you get HB / CTC , its the PROFIT you make that will determine how much your benefit will drop.

In theory as you start you profits will be low and this will not affect you claim very much ,but the reality is like many going into self employment, at some point you have to make a jump from making little profit into making " to much" to continue claiming and this is the fear of many whom have had the HB safety blanket to fall back on.

I have even heard some ex NEA claimants say they will do just enough to stay under the bracket so they can continue claiming HB , a real no hoper of a business if that is the case.

Any profit is a taxable figure and that taxable amount is what you give the HB so they can assess you on a periodical basis, usually every 2-3 months , and as your PROFIT rises your HB claim will reduce , and then as the next claim assessment is made they will determine the amount they will pay depending on the previous months profit.

At some point hopefully your business gains pace and you earn to much profit to get HB and only fairly then will your claim stop and you then cover the full amount yourself.

pinkypoopydoo , well done you can really start working your business hard now and forget NEA , nothing but a ball and chain.

WantToBeSE

Well done Pinky, bet you are really pleased that's over and done with and you are freeee!!

s450

TrueBlue1965 wrote: »

NEA payments dont effect Housing Benefit, Working Tax credits or Child Tax credits. In effect, NEA payments are free money for 26 weeks.

What you earn from your business will effects your Housing Benefit. The more you earn. The less Housing Benefit you will get. Housing Benefit will be reduced as you earn more money from your business Once you earn £X. You will then recieve no Housing Benefit but you will be better off than before you started working for yourself..

If you need to know how much Housing Benefit you will get once you switch over to being self employed. You need to do a better off calculation and put in the amount of earnings in to the calculator to see how your Housing Benefit will be effected. Maybe, state that your earning £50p/w in one better off calcuation. Then, try doing another better off calculation where you earn £100p/w ect. By doing several different better off calculation. You will soon see how your Housing Benefit will be effected by how much your business earns.

Thank you for the explanation!
Sorry for playing a little bit the dump but could you please be so kind as to explain to me quickly where and I do I do the better off calculation? Is something that I do online on the website of the Council or is it something I will have to write myself on a word/excel document? How should I exactly proceed? You spoke of a calculator. Is there an official one somewhere to find?

TrueBlue1965 wrote: »

Remember, the NEA payments are in effect free money. So, you dont need to state that you are getting NEA payments in your beter off calculation or when you make your claim for Housing Benefit.

So, when I go to the council, what should I say? That I have signed off and registered as a self-employed? I do not need to mention that I am getting NEA payments?
What about the 2 class National Insurance Contributions? As far as I have understood I do also have to pay this tax. Are also here the NEA payments free of taxes and I do not need to mention that I am getting them when registering with HMRC?

Many many thanks in advance for the support.

Regards

s450

Sorry, I deleted this post since I noticed that I was asking something that I already asked in an old posting.

This_Year

Well done Pinky! I had to provide proof last week of trading last week too. Can understand how pleased you must be!

Andy2013

I have been finished with NEA for a couple of months now ( thank god ) and about 2 weeks ago I got an email from my ex scheme asking me to provide similar proof I was still trading.

I phoned them up to tell them this would not be happening as they could not be bothered with any contact during my 6 months on the scheme so as I had left they would not be receiving any such thing.

And the response was " sorry we had no idea you were finished with us "

????? This just sums up a totally hopeless experience of NEA , they didn't even know I had finished , good Jesus . :rotfl: