Worth Considering

•  If you are on benefits, starting up in business through one of the Jobcentre schemes is worth considering.

•  They basically allow you to test out whether self-employment would work for you whilst initially staying on benefits. If it does not work out you return to benefits.

•  This approach may also improve your chances of funding from sources such as The Princes Trust or others.

•  New Deal for Young People and New Deal 25 Plus are only open to those on Jobseekers Allowance. New Deal 50 Plus and Work Based Learning For Adults (WBLA) are also open to those on Income Support or Employment Support Allowance / Incapacity Benefit.

New Deal for Young People (18-24)

•  This route will only be open to you if you are on Jobseekers Allowance

•  You will have to join this scheme anyway if you are aged between 18 and 24 and have been continuously claiming Jobseekers Allowance for 6 months.

•  You can ask to go on this New Deal before you have been claiming Jobseekers Allowance for six months if you are homeless. However, you need to remember that once you are on New Deal you are subject to the same restrictions and sanctions as everyone else.

•  An important point is that you will need to get the agreement of your Personal Advisor that the self-employment option is the right one for you. Ultimately it is the Personal Advisor's decision

•  If you get the Personal Advisor's agreement to go on the self-employed option, then for the first 16 weeks ‘gateway' phase you will prepare for self-employment. This will usually involve: a full assessment of your business idea; counseling or a short course on being self-employed; and drawing up a business plan.

•  The next stage is a period of up to 26 weeks supported ‘test trading' if you are not ready to move straight into self-employment. During this time you have the support of a personal business advisor who will also draw up a Training Plan with you to improve your chances of success. A bank account will be opened for the business but during these 26 weeks the advisor will have to jointly sign any cheques with you on the account

•  During the ‘test trading' period you will receive an allowance from the Jobcentre equal to your Jobseekers Allowance plus an extra grant of £400 spread over the 26 weeks. You cannot take any wages or profits from the business during this time – any profits stay in the bank account

•  At the end of the 26 weeks you have a choice. You can go into business full-time and come off benefits (any profits made will then be released to you). Or you close down the business and return to benefits.

•  You can continue to receive support from the personal business advisor for up to a further two years after you finish test trading

New Deal 25 Plus

•  This route will only be open to you if you are on Jobseekers Allowance

•  You will have to join this scheme anyway if you are aged over 25 and have been claiming Jobseekers Allowance for 18 months

•  You can ask to go on this New Deal after you have been claiming Jobseekers Allowance for one year if you are homeless. However, you need to remember that once you are on New Deal you are subject to the same restrictions and sanctions as everyone else

•  An important point is that you will need to get the agreement of your Personal Advisor that the self-employment option is the right one for you. Ultimately it is the Personal Advisor's decision

•  The way that the New Deal 25 Plus Self-Employment option operates is very similar to the Self-Employment option under the New deal for Young People (see above). The only significant difference is that training is not a compulsory part of the process on New Deal 25 Plus

New Deal 50 Plus

•  This is a totally voluntary New Deal scheme which you can choose to go on if you are aged 50 or over and have been claiming Jobseekers Allowance, Income Support or Employment Support Allowance / Incapacity Benefit continuously for 6 months.

•  You can use this New Deal to get advice on starting up a business and drawing up a business plan.

•  You can receive a Training Grant up to £1500. You might use this for training in things like bookkeeping or marketing.

•  You can also get a tax credit of up to £1935 for one year. You have to apply for this within one month of starting your business.

Work Based Learning For Adults (WBLA)

•  This might be your quickest way of getting onto a Self-Employment scheme if you are aged 25 or over. You normally need to have been receiving Jobseekers Allowance, Income Support or Incapacity Benefit for 6 months. However you can ask to go onto WBLA sooner if you are homeless.

•  The help of an employment support worker in approaching the Jobcentre is recommended if you want to get onto this scheme early

•  This scheme lasts for up to 18 weeks during which time you receive an allowance equal to your benefits and usually receive an extra £10 per week training premium. You can also receive help with travel expenses.

•  Stage One is a week of advice and information about running a business

•  Stage Two involves four weeks developing a business plan, doing market research and training for self-employment

•  Stage Three stage is a period of up to 13 weeks supported ‘test trading' if you are not ready to move straight into self-employment. During this time you have the support of a personal business advisor. A bank account will be opened for the business but during these 13 weeks the advisor will have to jointly sign any cheques with you on the account. You cannot take any wages or profits from the business during this time – any profits stay in the bank account

•  At the end of the 13 weeks you have a choice. You can go into business full-time and come off benefits (any profits made will then be released to you). Or you close down the business and return to benefits.