Beginner’s Guide on Starting a Halal-certified Business in the United Kingdom

Starting a Halal-certified Business in the United KingdomAccording to Pew Research Centre, the United Kingdom Halal market is currently worth $4.5 billion, with an expected growth rate of up to 5% each year. Globally, Muslim consumption is expected to increase up to $2 trillion by 2021. Although traditionally associated with a Muslim concept, these days, people from every religious and cultural background are patronizing halal products for their perceived quality. With the opportunity it presents, starting a halal-certified business in the United Kingdom is definitely worth considering.

There are 3.3 million Muslims in Great Britain, as per the pre-pandemic census. The growing number of Muslim consumers has led to a parallel rise in the demand for Halal products. As a result, manufacturers and businesses have started implementing halal standards.
Guide on starting a Halal-certified business in the United Kingdom which explains the industry practice, business registration, licenses, and permits.

 

What is Halal?

To clarify, the Arabic term ‘halal’ refers to anything ‘allowed’ by Islamic law. It includes the notion of ‘toying’ or ‘good quality.’ It is the opposite of ‘haram’ or ‘illegal’.

Often, halal is associated with food products, especially meat. According to the Quran, halal meat should come from healthy and alive animals allowed to be eaten under Sharia law. The animals should be able to live in their natural habitat. Furthermore, prior to the slaughter, the butcher should recite a dedication to God. To completely drain the blood, the jugular vein and carotid artery of the animal must be thoroughly cut.

Halal and haram are not limited to dietary practices and food. They also include a wide range of customs and human conduct. For example, alcohol, gambling, and deceiving others are haram under Sharia Law. This is why the United Kingdom halal market also includes fashion, pharmaceuticals, cosmetics, and even the finance industries.

 

What is a Halal-certified Business?

In general, a halal business must protect the five Maqasid or purposes of Sharia Law. These objectives include the essential needs of human life: religion, life, lineage, intellect, and property. Therefore, a Halal business must serve the basic needs of society or the public interest. It must not focus only on personal profit or luxury.

A good Muslim businessperson engaged in producing halal products owns a halal business. However, being a Muslim is not a prerequisite to taking part in the halal industry. In fact, even non-Muslim businesses who comply with the Maqasid of Sharia Law can apply for Halal Certification.

 

The Process of Halal Certification

Halal certification can help businesses keep customers’ trust. In the United Kingdom, the number of Halal Certification Bodies (PCBs) is unknown. Furthermore, there is no standard in the Halal certification process in the United Kingdom. As a result, Halal fraud has been increasing in recent years. You can contact 3E Accounting to assist you in finding the HCBs you can trust.

To start the halal certification, a business must first submit its application and supporting documents to an HCB. The HCB will then conduct document reviews, inspections, recommendations, audits, and evaluations, before the final certification. Depending on the HCB, there can be an annual renewal audit and certification.

Finally, with the issuance of halal certification, the business will receive a halal label, which is valid for one year. It’s a good idea to display your halal label or logo on your website and products to increase customer awareness.

 

How to Register a Halal-certified Business

Sharia law is very strict about compliance. In the United Kingdom, a business can only apply for halal certification if it has completed United Kingdom Company registration. As you can see, one of the required documents for Halal certification is a Certificate of Incorporation.

Create a Business Plan

You need a business plan for starting a halal-certified business. The most basic plan will include your core business activities, budget, niche, and goals. This is important because a halal-certified business does not only involve your company but an entire business supply chain. In other words, a truly halal product or service is procured, manufactured, transported, and distributed in a halal way.

Decide Your Business Structure

Before you can incorporate a halal business, you need to identify whether it will be a sole proprietorship, a partnership, or a limited company. Limited companies will register their business at the Companies House. Whereas, a sole trader or a partnership needs to register their business with Her Majesty’s Revenue and Customs (HMRC).

During the registration process, you need to identify the company’s director, shareholders, and people with significant control. You also need to be ready with documents that show how to run the company. Lastly, you have to be familiar with the accounting and financial records that you need to keep.

Choose Your Business Name

When choosing a name for your business, make sure that it is not too similar to existing companies. You can use the Company Name Availability Checker found on the Companies House website. Note that there are some regulated words and expressions that require special permission to use, such as Majesty, Royalty, etc. Also, avoid any sensitive or offensive words, as it is prohibited by the United Kingdom and Sharia Laws.

Register an Official Address and SIC Code

You need to choose a registered address before starting a halal-certified business. It must be located in the United Kingdom and be a publicly available address. It cannot be removed from the online registration after publication.

Another important step is to identify your company’s SIC code or Standard Industrial Classification number. This is a number system that allows the government to narrow down a company’s business activity. A company can have one to four SIC codes when incorporating a business or registering for VAT.

Submit Registration and Pay Fees

Once all documents are ready, you can submit your registration through the Government Gateway website or through an agent. When using the website, you need to create your company’s user ID and password. The fee for registering your business online is £12.

Registering a business in the United Kingdom takes only 24 hours. However, you may feel overwhelmed to do all the leg work needed to launch your halal-certified business. 3E Accounting services provides innovative end-to-end solutions for all your business needs. To help you focus on managing your business, you may take advantage of our company incorporation services.

 

Licenses and Compliance When Starting a Halal-certified Business in the United Kingdom

Any company that registers with the Companies House will automatically be registered for Corporate Tax. Depending on the nature of your business, you will need different licenses to operate a halal business in the United Kingdom. For instance, if you sell goods to other EU countries, you need an Economic Operators Registration and Identification number. To give you an idea of the licenses you may need for the halal certification, consider the following:

Food

Certificate of Competence (CoC). The United Kingdom government requires stunning animals that will be slaughtered. This may conflict with the requirements of Halal certification. Ensure proper stunning procedure acceptable to your HCB’s standard.

Food Establishment Approval. This is a requirement for those who process and sell meat, dairy, fish, and other animal produce to other businesses.

Food Business Registration. This is a requirement for any food business that caters directly to customers like restaurants and catering businesses.

Fashion

  • Market Stall License issued by the local council. It allows you to run a market stall.
  • Packaging waste registration (England, Scotland, and Wales) is required for businesses with an annual packaging of more than 50 tonnes.

Pharmaceuticals

  • Manufacturer/Importer Licence and Good Manufacturing Practice (GMP) Certificate. This ensures your company’s compliance with GMP.
  • Wholesaler License and Good Distribution Practice (GDP) Certificate. This ensures your company’s compliance with GDP.

Cosmetics and Personal Care

  • Cosmetic Product Safety Report submitted to the Cosmetic Products Notification Portal. It includes material safety data, a certificate of analysis, and an allergens declaration list.
  • Microbial Lab Testing. This includes testing for microbial growth by specialized labs (such as SGS.co.uk)

Finances

  • Financial Conduct Authority (FCA) Authorisation. Allows and regulates financial businesses in the United Kingdom.
  • Financial Services Authority (FSA) Authorisation. Regulates financial services and markets in the United Kingdom.

 

Acquire a Business Insurance

In Islam, insurance is halal because it mitigates risk and provides certainty. When starting a halal-certified business in the United Kingdom, you need to have insurance obliged by law.

  • Employers must have Employers’ liability insurance.
  • Businesses that use vehicles should have commercial motor insurance.
  • Professionals must have professional indemnity insurance.

Additionally, there are special rules for companies that sell goods online, import or export goods, or store personal information.

Starting a Halal-certified Business in the United Kingdom

 

Conclusion

Starting a Halal-certified business in the United Kingdom is a timely decision. It not only expands your consumer reach but also improves your brand’s image and quality. If you’re considering a halal-certified start-up or a small-to-medium firm, 3E Accounting can provide you with the cost-effective support that you need. As a one-stop corporate service provider in the United Kingdom, we offer customizable solutions to help you in starting a Halal-certified business.