Posts Tagged ‘Test Trading’

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.

Not sure if your business idea is viable? Try Test Trading and ease your way in

test trading shopTest trading is a government initiative to help entrepreneurs come off benefits and become self employed. The leap into self employment is a bold move for any disabled person on benefits, as recent Government policies on benefits have made some disabled people nervous about the future. In recent years people who have come off their benefits to go on Government schemes have found it difficult to get back on the same benefits they were used to. This uncertainty has led many disabled people to be distrusting of Government schemes aimed to help people back into employment.

Test Trading is a scheme which assists with this problem. By joining the Test Trading scheme an entrepreneur can effectively trade for 6 months and still receive their benefits. At the end of the 6 months the person can decide whether to stop trading and remain on their benefits or to carry on trading and come off their benefits. There are some advantages and disadvantages we will discuss later.

To join the scheme budding entrepreneurs will need to contact their DEA Disability Employment Adviser to find out if Test Trading is available in their area. If the scheme is available then your DEA should signpost you to your nearest provider, who will enrol you on the scheme.

There are 3 stages to Test Trading

Stage 1

This will be a meeting between you and a business adviser to discuss your business plans. The adviser will give you support in writing your business plan and will assess what other support you may need.

Stage 2

At this stage you will be developing your business plan, looking for grants and applying for Access to Work.

Stage 3

This is where you will start your business and have your full benefits for 26 weeks. There will be continual support from your business adviser on a weekly basis, via face to face meetings or via the telephone.

Hopefully at the end of the 26 weeks your business will be stable enough to support you and you will come off your benefits.

Before you finish Test Trading you will need to work with your DEA to see if you are eligible for Working Tax Credits, which could offer you further financial support. Test Trading is just one route a disabled person can take when wishing to start up in business. Permitted Work from the Job Centre, Working Tax Credits and starting a Limited Company are other ways to gain financial support whilst starting up in business.

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