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HMC ‘was left with six figure bill'

The Halal Monitoring Committee (HMC) is in the process of being dissolved after it was served with a winding-up order.

But the organisation says it is set to continue its 'invalubale work' for the Muslim community.

The order has been forced upon the charity after ‘cash flow’ issues and confusion over the payment of Value Added Tax (VAT) it claims.

A total of 28 establishments are now HMC certified in the region. In contrast to the more widespread Halal Food Authority (HFA), the HMC says it takes a more detailed approach to ensuring that food at their certified outlets are halal.

And they say this has proved popular with members of the public.

It is believed the winding-up order relates to a six figure VAT bill. In a statement on their website the HMC said, “In September 2011, HMC registered for VAT as agreed with the HMRC. Previous to this, HMC believed it was exempt from VAT due to the nature of its work and charity status.

“In early 2012, HMRC informed HMC that it should re-bill all its pre-existing customers for VAT dating back from 2005 and make payments due.

“The majority of pre-existing customers would be able to re-claim VAT from HMRC but could not pay due to cash flow.

“This requirement by HMRC caused HMC to have significant unforeseen cash flow issues that it could not reconcile and settle with HMRC.

"After consulting with Scholars, and in response: HMC UK has been established by concerned trustees and Ulama to continue the work of Halal."

Since February 2012 it has already taken on the responsibility of supplying genuine halal to over 500 outlets throughout the UK.

Yunus Dudhwala from the organisation said, “The closure has happened due to a technical issue that HMC were totally unaware of.

"From the outset of HMC, we never charged VAT for the services of monitoring and inspection as per advice received and operated as a religious organisation and a charity.

“HMC did not invoice, nor charge, nor collect VAT for 8 years on the advice received”.

A statement added, “None of the Directors or Trustees benefit financially or otherwise from HMC as all work is done totally voluntarily. “The work for Halal continues with dedicated brothers wishing to step up to protect Halal. The community’s continued support for HMC is invaluable. “The Muslim community needs an organisation to protect us from what we are unwittingly eating.

Insha-Allah HMC will remain at the forefront of this work for years to come.”

According to creditors’ report Asian Image has seen, in 2009 the company had a turnover of £759,147.

And in 2011 £849,309 was paid as employees remuneration.

However, say this was not a huge amount as they had 140 staff who inspected a range of establishments and slaughter houses.

Salim Mulla, chairman of Lancashire Council of Mosques said, “The LCM had a criteria for halal food and the HMC met that criteria.

“We invited other halal organisations to see if they could meet the criteria set out. This criteria was what our community wanted and scholars had agreed.

“We support the valuable work they have done in highlighting the issue of halal food.

"There is a need for an organisation such as HMC and we would be delighted if they are continuing this work".

With regards to the amount of money being paid to employees Mr Mulla said, “Any organisation such as HMC would require people to go out and inspect food and establishments.

“This is what made the HMC strict criteria so welcome.” The HM Revenue & Customs said they did not comment on individual cases, But a spokesman added, “HMRC’s aim is not to wind up companies or make individuals bankrupt, but to collect, as efficiently as we can, the debts that are due.

“HMRC only initiates winding up or bankruptcy action where it believes this is the best course of action to protect the interests of the Exchequer in respect of a particular debt. We do not take such action lightly.

“Anyone who is struggling to pay an HMRC debt should call us. HMRC has an outstanding track record in supporting those who are experiencing genuine difficulty paying their debts, and this approach will continue.”

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