Test Trading Vs Permitted Work Vs Working Tax Credits for the disabled entrepreneur

Test Trading Vs Permitted Work Vs Working Tax Credits for the disabled entrepreneurStarting a business is tough! Thankfully there are different government schemes available designed to financially support a disabled entrepreneur when starting their own business. Entrepreneurs now (if they are eligible) have several options for financial support when running their business. Schemes such as Test Trading, Permitted Work and Working Tax Credits are the main three schemes that entrepreneurs join to get financial help when they first start their business.

If a disabled business person is eligible for all three schemes, then some time must be given to consider which is the most suitable for them and the business. Each one has advantages and disadvantages, the wrong choice could mean missing out on grants and other financial support.

Test Trading

Advantages
1. You can stay on your benefits whilst testing your business idea for up to 6 months.
2. After the 6 months if you decide to go back on your benefits there is a smooth transition back to your existing level of benefits.
3. You are eligible to apply for Access to Work.
4. You will be allocated a business mentor to help you develop the business.

Disadvantages
1. You will have a joint bank account with the provider of Test Trading. These providers are usually flexible but it could mean a delay when you want access to your money. This may not affect a lot of businesses, but if you need money quickly for a contract and it’s out of office hours, then there could be a problem.
2. You may not be eligible for grants that are only issued when you sign off your benefits.

Permitted Work

Advantages
1. You are eligible to apply for Access to Work.
2. You can trade whilst still receiving your benefits
3. You can stay on the scheme for up to a year

Disadvantages
1. You can only trade for 16 hours
2. You can not earn over £88.50 profit without it affecting your benefits
3. You may not be eligible for grants that are only issued when you sign off your benefits

Working Tax Credits

Advantages
1. You could receive a payment that totals over your current level of benefits.
2. It is possible to stay on the scheme over a year.

Disadvantages
1. Receiving Working Tax Credits may affect other benefits, lowering your overall benefit income
2. At the end of each year you will be reassessed, which will involve the completion of documents.

8 Responses to “Test Trading Vs Permitted Work Vs Working Tax Credits for the disabled entrepreneur”

  • i have been on benifits for three years, i have been phisical and mental health problems, but have been working very hard to improve my life , after the death of my son, a heart attack, and skin canser, it has been a hard struggle, but i have now nearly reached my goal, in starting a m/blie food buisness, i am vry worried about my change from benifits, to supporting myself, and i am trying to deal with the final steps to completion, i have been looking for the right help but have been very frustrated, in trying to find help from the right direction , my main conserne is my home and security, making a decision, to take the final steps, is always a set back, and makes me worried for my well being . i would like some help in finding the right way, thank you , nelson digby

  • Jon:

    Hi Nelson

    Do you qualify for Test Trading, Permitted Work or Working Tax Credits? Are you on benefits at the moment? What are your concerns? are they financial?

  • hi jion, well i am still receiving incapacity, and pention credit,i am ready to start, as far as my buisness aquipmentand tools for the job, i have just finnished radio therapy, and i am recovering well,i have also had surgery, removing malignent basal cell cacanomas, for the 13th time, my new pacemaker has been renewed with a more moden one , the other was in since the falklands, and my collet stent is holding up, so im like my catring truck, ready to go,my main conserne as i said is my well being, and i suppose that im worried, to take the last steps, a set back could ruin my last chance, to provide for myself and prove to evrybody that has supported me throughout my recovery, my mental state is much improved,and i can focuse my mind much more, i feel hesitant, my aim is to start work on the first of january 2010, in the local shoping mall where i live, , but to do this ive to pay a consent fee of one thousand pound to the local counsilwich would use all my stock and starting funds leaving me nothing, also becuase im not totaly one hundred percent i am not able to approach the counsil for the permission, because of being treeted like just another hot dog van with crap food at high prices, when there is so much more to what i have acheived, if i had more confidence to approach the right people,i could have started some time ago . its always been my worst fear . to be rejected. by , the people who can realy help, i think its important, for them to know that its not just starting a buisness its starting my life again, the process of approaching the right people is confusing to me so many deparments and finding some one in the end who dosnt give a hoot, if i was sure that i was fully protected, on my transition, i would be more sure of my well being,i think any body coming up from the depths of despair, needs a little more support than others who have not sufferd the obsticals, that others have ,im not looking for the simpathy vote, just a bit of help, when it counts, ive saved the lives of 47 people, in my time, and have acheived some amazing things, i have great skills,so im confident that i can be succsesful,. the name of my company is victory mble catering, the name is not just connected to my name its also connected to what can be acheived, a real victory,, thanks for your consern, nelson

  • Jon:

    Hi Nelson

    Are you certain that you have 100% of the support on offer. If you start your business before getting all the support then you may miss out. The Government has just started a new program called self employment credits which equals £40 per week. Also is there any support from the army. In th past i have come across grants to help ex armed forces set up in business

  • hi i am a bit confused about test trading. i have completed stage on and two and am now going to undertake test trading. I want to open a cafe and have the back up of my benefits for a few months till i build up the business and obviously another one or two members of staff need to be hired as i could not possibly run this business on my own as it will be open 7 days a week 6am to 5pm. I have found premises, my mum and dad are going to be staff as i want it family run but my business mentor has told me today you cannot hire staff when test trading under steps to work!! How can i possibly test trade this business without staff? Im now worried and been searching all over the internet but found nothing on this area. Please reply back as am now in two minds for becoming self employed. thanks

  • Mike:

    I have never heard of that rule before. Can you ask the provider to check that or show you something in writing. I know of many people who have a support worker and have been on Working Tax Credits at the same time.

  • Tony:

    Hi there, I am confused as to which type would be best for me; Test Trading, Permitted Work or Working Tax Credits?
    I have been on Incapacity Benefit for 6 years and would like nothing more than to get off it.
    I hate sponging off the government and would like to get my 'sense of pride' back – knowing I am not relying on others to support my needs.
    I'd worked since leaving school (25 years) but ended up with bi-polar disorder. I get the full amount of I.B – £91.40 a week, my wife works part-time and we have a 2yr old daughter in nursery.
    I have been trying to set up a cleaing business and have had my first enquiry for work. The cleaning requires 2 persons 3hrs a day / 3 days a week – totaling 15hrs each a week. We would both receive £85 each a week for the work.
    As I understand things the £85 I would be earning will keep me within the threshold of the 'Permitted Work' allowance – currently £93/95 and will not affect the £91.40 I.B for the next 52 weeks.
    Question1: Would I have to add my I.B of £91.40 + cleaning wage of £85 together for tax purposes? As this would give me a yearly figure of £9172.80 paying a weekly tax of £10.38 and would these go down on the self-assessment form?
    Question 2:
    My wife and I currently receive Child and Working Tax Credits as she works part-time and is on a low wage and of course I am on I.B. Our daughter is currently at nursery on the few days my wife is at work – basically so she can work! At present 80% of the nursery fees are paid for through the child tax credit scheme.
    What I would like to know is if the extra £85 a week I would be earning from the 15hrs cleaning would affect any of the child tax credit or the element which pays for the nursery fees. Would we simply get £85 less in tax credits than we are getting now?
    I'm not bothered whether the £85 gets given to one hand and is taken out of the other, as I would prefer to earn the money myself than take handouts and it will also get me back into the swing of things. My obvious main concern is whether as a family we will be worse off than not doing the work at all.
    Taking into account the £10.38 tax I will pay on the earnings or any reductions in child tax credit/child tax element for nursery fees or working tax credits (which are very little anyway – just a few pounds).

  • Mike:

    Hi Tony

    You really need to speak with your DEA at the job centre to see what is available to you. If you are on In cap then you should be eligible for permitted work. There is a new scheme coming out called “Enterprise Allowance” ask you DEA. The thing to be careful about is if you can get back on your orginal benefits if things do not work out. I would hate to see you loose out.

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