"The payments are made under Section 2 of the Employment and Training Act 1973.
Enterprise Allowance weekly payments made to self-employed participants
are exempt from income tax. They should therefore be excluded as income
for the purposes of calculating the trading profits chargeable to tax.
New Enterprise Allowance weekly payments made to self-employed
participants are disregarded for the purposes of Class 4 NICs.
individual is liable for Class 2 NICs, but in calculating their profits
they may disregard New Enterprise Allowance weekly payments."
I can see from NIM21028 and Regulation 45(2)(b)(iii) of the Social Security (Contributions) Regulations 2001 why there's no NIC, but I can't see a tax exemption anywhere. ITTOIA s781 exempts payments under the New Deal 50Plus scheme, which was created under the same ETA 1973 section as NEA, but I can't find anything specific to NEA.
In reply to David Heaton:
How do I apply for Enterprise allowance