New Enterprise Allowance

The New Enterprise Allowance (NEA) Scheme is a Jobcentre Plus-funded programme to help unemployed people (claiming Jobseekers’ Allowance for a minimum of 6 months) to start their own business or to become self-employed. You must be referred to see one of our team by a Jobcentre Plus advisor, so if you believe you’re eligible then please ask to be referred.

If you are eligible, then an appointment will be arranged for you at the Jobcentre where you sign-on. You will need to follow a particular pathway in order to satisfy certain requirements of the scheme and this is explained below:

Stage 1: Initial Sift

An appointment with a SENTA business advisor where your business idea is discussed. The advisor will make a decision, based upon information about your idea, upon whether the NEA Scheme is an appropriate route for you to take. You will also decide, once you have been given certain information about the scheme, whether you want to participate.

Stage 2: Business Planning

If you get through the initial sift, there will be a pause of no more than 2 weeks before you start this stage. The pause will enable us to find a business mentor for you. Once we’ve done that, you will start this (maximum 8 weeks) period.

We will offer you a place on a business planning workshop (this is optional) and you will engage with a business mentor. Our mentors are volunteers and most of them already run successful businesses. We can’t guarantee that their business will be in any way related to the one that you intend to start, but they have all been through the starting-up process that you will be involved in, so will be able to guide you through that process and counsel you on many of the aspects of running your business that you will need to understand.

By the end of this stage, we will need you to produce a written business plan (attending the workshop is the best way to get help with this). Once we have received your business plan, we will be discussing the start date for your business (which should normally happen withing 2-3 weeks after your business plan has been produced).

Stage 3: Test Trading

This is a period of (maximum) 26 weeks, during which you will start trading. In order to ease you into self-employment, you will receive a tax-free allowance during this period. For the first 13 weeks it will be equivalent to Jobseekers’ Allowance (currently £65 per week) and for the second 13 week period it will be paid at £33 per week. You will be self-employed from Day 1 though, and will no longer need to attend at the Jobcentre to sign on.

You will be required to provide evidence on 3 occasions during this 26 week period that you are actively involved in running your business (appointments will be arranged for you to attend at the Jobcentre after the 6th, 11th, and 19th weeks of this period). You will need to register as self-employed with HMRC (if appropriate) from the first day of test trading.

You might be able to claim Working Tax Credits as well during this period, but this will depend upon your personal circumstances. Enterprise Allowance will stop after 26 weeks, by which time your business will need to be able to support your personal survival budget.

So, if you’re currently claiming Jobseekers’ Allowance, and if you believe you’re eligible to attend this scheme, then talk to your Jobcentre Plus advisor about an appointment.

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