Fatwa ID: 07065

Answered by: Maulana Burhaan Rahman

Question:

Someone has started a business recently. They’re Muslim. Their payment terms are 7 days from invoice date and there’s a charge of £35 per day for every day that the invoice is late.

In the name of Allah, the Most Gracious, the Most Merciful

Answer:

According to GOV.Uk

“It consists of the price of the goods or services obtained by the buyer. If an invoice includes the names of the seller and the client, the description and cost of the goods or services, and the terms of payment, it can also be used as legal documentation”.

Invoicing on the correct date (before invoice date) is vital for the business and also helps you refrain from paying the £35 bill +.

If this is the case and this is how the system works i.e. every day you don’t have the invoice on time there will be a penalty for each day, then this can be paid.

This isn’t riba (usury/interest) as such if one is curious and unfortunately this is how the invoice system works in the UK to ensure you pay on time and the system makes money if you don’t. This is a form of a UK bill. It’s part of the UK’s payment structure for businesses.

Our beloved prophet (SAW):

السَّمْعُ وَالطَّاعَةُ عَلَى الْمَرْءِ الْمُسْلِمِ، فِيمَا أَحَبَّ وَكَرِهَ، مَا لَمْ يُؤْمَرْ بِمَعْصِيَةٍ، فَإِذَا أُمِرَ بِمَعْصِيَةٍ فَلاَ سَمْعَ وَلاَ طَاعَةَ

A Muslim has to listen to and obey (the order of his ruler) whether he likes it or not, as long as his orders involve not one in disobedience (to Allah), but if an act of disobedience (to Allah) is imposed one should not listen to it or obey it. [Bukhari Hadeeth no: 7144]

Only Allah knows best.

Written by Maulana Burhaan Rahman

Checked and approved by Mufti Mohammed Tosir Miah

Darul Ifta Birmingham