New Enterprise Allowance scheme could be cut

(2 minutes to read)

The IPSE urges government not to abandon the New Enterprise Allowance (NEA) scheme, as rumours suggest that it could be cut.

After the government recently revealed that it would be putting an end to its pledge to abolish Class 2 National Insurance Contributions, there are now rumours that the NEA scheme will be cut.

This scheme helps those starting up a business, as well as developing an existing firm if you’re already self-employed.

If approved, you’ll have access to a mentor who’ll give you advice and support to help with your business. You may also get a weekly allowance worth up to £1,274 over 26 weeks and can apply for a loan to help with start-up costs.

However, according to reports in the British media, Treasury officials have told business leaders that the Chancellor is planning to cut a scheme that had been designed to help people start their own business.

The Government had regularly praised the success of the scheme – which has helped over 100,000 Britons start their own business since 2011 – but it has now emerged that the Chancellor is not expected to renew it at the Autumn Budget.

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Andy Chamberlain, IPSE’s Deputy Director of Policy, commented, “The New Enterprise Allowance has put over 100,000 people onto the path of viable work, from the white van man to the one-woman band.

“Encouraging people into self-employment and to run their own businesses is an overwhelmingly positive thing for the economy, as it lowers unemployment and boosts Government coffers in the long term.

“The Government should think very carefully before axing the Allowance, and IPSE would like to see it reformed rather than repealed. IPSE is calling for more targeted financial and mentoring support for NEA-backed businesses after the initial start-up period, to increase their prospects of long-term success.

“What is doubly damaging about this move is the fact that it comes just 24 hours after the Government decided to backtrack on a pledge to abolish Class 2 NICs – an awkward levy which applies only to the self-employed.

“Can it really be true that the supposedly pro-business Conservatives would attack small business twice within 24 hours?

“Both moves are fundamental breaches of faith with the self-employed. How can they possibly be expected to drive the UK economy forward if they are constantly looking over their shoulder wondering when the Government will come for them next.”

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