How do I apply for Enterprise allowance
Tell your work coach in the job center you would like to try being self employed - you will need a business idea. They refer you to the new enterprise people who come in to the job center. You still sign on whilst they have interviews with you, mentor and provide advice etc. You wont have to show you are looking for jobs any more. When you are ready and are about to start trading you sign off and you start receiving your allowance.
I did it and it was fine. You have to show evidence you are trading but you send this to the new enterprise people not the job center. Evidence would include contracts for work, sales, communication with potential customers (ie advertising) they just want you to show you are behaving like a company and not twiddling your thumbs. I would suggest you do most of your setup before you sign off and be ready to start trading or already have contracts agreed. So the problem of evidence is not a problem.
There is a section on the self assessment tax form which is called other income. But if it affects the tax total I don't think the NEA grant should be entered here as it should not affect income tax. A case of trial and error on the form.