What is the New Enterprise Allowance scheme?

There are no shortage of good business ideas out there, but often what prevents them going from business idea to business reality is money and support. The New Enterprise Allowance is there to help people who receive certain benefits to take the first step towards implementing their business idea.

Who is the New Enterprise allowance for?

To benefit from the New Enterprise Allowance applicants must be aged 18 or over. They, or their partner, must also be in receipt of Jobseeker’s Allowance, Employment and Support Allowance or Income Support if they are a lone parent, or sick or disabled. It’s possible to be eligible if you receive Universal Credit, including if you are self-employed.

Most applicants are referred to the scheme by their Jobcentre Plus work coach, who will check eligibility.

The scheme enables you to attend a workshop to help you decide whether self employment is a route that might suit you. You’ll also be given a business mentor whose experience you can draw upon to develop your business idea. They will give you the support you need for 52 weeks of the year after your initial training.

How does the scheme work?

Applicants will get time with a business specialist who will talk through your idea with you or they will assess your business if you’ve already begun trading but you’re after a little more support. Once it’s been approved you’ll be signed up to the scheme and allocated a business mentor. It’s possible they will advise you to go away and put more work or thought into your application if you aren’t immediately successful. To access the financial support, your business plan will need to be approved by the assessor and you’ll be obliged to commit 16 hours or more per week to your enterprise.

How much are the New Enterprise Allowance payments?

Once accepted onto the scheme you will get a weekly allowance that lasts up to 26 weeks, which amounts to a total of £1,274. This amount will help you get the ball rolling, maybe to pay for publicity, promotion, print costs, equipment, and so on. Your mentor may be able to help you plan how to efficiently make use of your allowance. You can also apply for a loan to help with start up costs. Unlike the allowance, the loan does need to be paid back, however.  Your Housing Benefit, tax credits, Income tax, Universal Credit or Access to Work grant are not affected by any of the money you are given over the course of this scheme.

Is the New Enterprise Allowance taxable?

New Enterprise Allowance payments made to the self employed are exempt from income tax. They should not be included as income when calculating tax-chargeable profits.

How to apply for the New Enterprise Allowance

You can find a more detailed breakdown of the New Enterprise Allowance scheme on the government website . You will need to apply through a Jobcentre advisor.

Getting your own business off the ground is incredibly exciting. It’s great to see all that effort, time and energy beginning to pay off. But looking after your investment means more than the day-to-day operations, it’s also about securing the right level of cover in the event that things go wrong. Find out more about our small business insurance today. 

 

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