Fatwa ID: 06409
Answered by: Alimah Zakiratul Hoque
Question:
We run a family business and are based in Birmingham. I just wanted to ask about Zakat and how it is calculated on business assets, please.
This query only relates to our business zakat liability. We are already aware of our personal zakat liabilities.
We run a scrap yard business. The premises itself is on lease and we pay both rent and rates for that. We have plant and machinery at the business premises which is used on a daily basis by us. We have 2 Recovery Trucks, a Forklift Truck and a Crane Machine. This is the machinery we possess to run the business and as I mentioned this machinery is used by us regularly in order to conduct our business. 1) Are we required to include the cost of this plant and machinery when working out our business Zakat liability, please? If so, do we calculate the current market value of this plant and machinery or the cost of the purchase to us?
We also have business stock at the premises, we have a stack of about 42 cars and we sell their parts as and when someone wants to buy their parts. 2) Are we required to include the cost of these cars when working out our business zakat liability?
Finally, sometimes we send a container abroad to sell car parts (exporting). We currently have stock enough to fill up 1 container sitting at our premises at the moment. 3) Are we required to include the cost of this stock when working out our business zakat liability, please? If so, do we deduct the expenses of shipping which we will incur when sending the container and then whatever the total is left, work out the zakaat on that amount?
In addition to this, the business also owns a fleet of some cars which our employees drive and use for both business and personal use. 4) Are we required to include the cost of these cars when working out our business zakat liability, please?
I will be grateful if you could please provide me with a detailed bespoke response to my query as we want to make sure we are working out our business zakat properly and paying what’s correctly due.
In the name of Allah, the Most Gracious, the Most Merciful
Answer:
Zakaat is obligatory on trade goods when they reach the Nisaab of gold or silver (Fatawa Hindiya, Vol 1, Pg 197). Zakaat is only paid for the things that are being used for trade (bought to be sold) (Badai Al Sanai, Vol 2, Pg 429).
1) No, you do not need to pay Zakaat for the plant or machinery because they’re not goods that are being sold
2) Yes, you do need to pay Zakaat on the cost of the cars as parts of the cars are sold (used for trade)
3) Yes, you do need to pay Zakaat for the stock that would be shipped to be sold. Zakaat would only be paid on the value of the stock (the shipping costs would not be considered).
4) No, you do not need to pay Zakaat for the cars which the employees use
الزكاة واجبة في عروض التجارة كائنة ما كانت إذا بلغت قيمتها نصابا من الورق و الذهب
أما صفة هذا النصاب فهي أن يكون معدا للتجارة و هو أن يمسكها للتجارة و ذلك بنية التجارة مقارنة لعمل التجارة
Only Allah knows best.
Written by Alimah Zakiratul Hoque
Checked and approved by Mufti Mohammed Tosir Miah
Darul Ifta Birmingham
