Accountants slam New Enterprise Allowance as 'hair brained'
Posted by Dan Martin in Finances, Business trends, Regulation on Thu, 06/01/2011 - 11:54
A group representing accountants and lawyers has dismissed a new government scheme to turn the unemployed into entrepreneurs as one which will make very little difference.
David Ingall, partner at JWPCreers and a member of UK200Group, described the New Enterprise Allowance, which the government says will create up to 40,000 new businesses by providing financial and mentoring support to unemployed people, as a "New Year fantasy".
It comes, he added, "at the same time that HM Revenue and Customs has announced it is to target 50,000 businesses a year over the next three years to see whether their accounting records are adequate or accurate."
Ingall continued: "The estimate from HMRC is that they are going to raise millions in penalties from those businesses, so on the one hand the government is offering to help businesses and on the other they are looking to punish them.
"It concerns me that the assistance will be offered to those with a viable business plan. Judged by who?
"I can see the only beneficiaries will be those offering to write business plans for the applicants, who probably will not understand what is being put forward in their name. I am sad that such a hare-brained scheme is being proposed by the government."
Daniel Shear, another member of UK200Group, was equally scathing saying the NEA was a "headline grabbing proposal that may not actually make an awful lot of difference".
"The scheme provides allowances of £1,275 over six months and a £1,000 loan to cover start-up costs," he added. "Whilst welcome, the quantum of the allowance/loan is small compared to the cost of launching most new enterprises, meaning the proposals may make little discernable difference to potential entrepreneurs."
The NEA will be launched in Merseyside later this month and rolled out nationwide in the Autumn. Around £50m is expected to be available.
What do you think about the New Enterprise Allowance? Do you believe it will make a difference? Post your thoughts below. You need to be registered and logged in to comment.
- 3644 reads
- login or register to post comments
- Add to a social bookmarking site
Dragons' Den judges James Caan and Deborah Meaden and social entrepreneur Karen Darby are some of the successful entrepreneurs who feature in our exclusive videos. 
Join our social media discussion group and share your Twitter username with other BusinessZone members. 
We've got lots of free books to give away; all you've got to do is review them!