Q: as online retailer we get money full upfront from customer and we deliver the goods in few 2 weeks time and after deliver we pay to supplier. so do we need to pay Zakat on this deposit money?
A: You will pay Zakat on the market value of the furniture ordered for the customers. Even if the money hasn’t been received fully you will still be liable to pay Zakat on the full value of the furniture. Money that you owe to your suppliers can be deducted from your Zakat calculation.
As an example: someone ordered an item worth £1000. The person paid £200 up front. On your Zakat day you will pay Zakat on the full value of the item i.e. £1000.
And Allah knows best
Mufti Billal Omarjee
Approved by Mufti Amjad 13th August 2023