Call to level the playing field as rural Post Offices facing four-fold business rates hike

• Rural Post Offices bearing the brunt of a major hike in business rates bills
• Post Offices are expected to pay just under £45m in total business rates over the next year, up £29m compared with 2023/24 (£14 million) - representing a nearly 200% increase for some Post Offices
• Post Office calling on the Government to deliver targeted rate relief

Small and rural post offices are braced for a business rates hit this year, as a major increase in their bills will see them collectively paying an additional £29m in the upcoming fiscal year, new research commissioned by the Post Office found*.

An analysis of the impact of the removal of business rates relief, new valuations and other changes to the system has led Post Office and postmasters to call for a level playing field for the hard-pressed network, and for special support to be targeted at crucial Post Office branches.

The average business rates bill a Post Office branch will pay this year is £3,700, while 1 in 4 branches are due to pay over £5,000 and nearly 1 in 10 branches are expected to pay over £10,000 in business rates. These high levels of tax are often disproportionate to their size and turnover.

The research found that Post Office branches are expected to pay £43m collectively in business rates in the 2026/27 financial year – representing a nearly 200% increase across the network. This year Post Offices will pay a higher share of their gross value added (GVA) in business rates – 10% - than the overall retail sector which pays less than 5% of its GVA in business rates.

These business rates increases are falling disproportionately on rural post offices, with the average rural branch facing around a four‑fold increase in its rates bill compared to 2023–24. Smaller and rural branches are less likely to be profitable and are now exposed to small valuation changes that trigger higher liabilities.

To ensure Post Offices can continue to provide their essential services in communities across the UK, they are calling on the Government to deliver targeted business rates relief across all four nations. This would be in addition to limited relief already available in Wales and Northern Ireland.

Paul Patel is the Postmaster at Dibden Purlieu Post Office in Hampshire since 2018 and has seen his business rates bill increase by over £2,000. Paul Patel said:

“I run a rural post office on the edge of the New Forest, serving a close-knit community that relies on us for essential services.

“Last year I paid £5,089 in business rates. This year, that has risen to £7,154 - a substantial increase that feels disproportionate to the size and turnover of my branch. At the same time, my rateable value has gone up by over £1,000, adding further pressure.

“These rising costs come on top of increased tax and National Insurance contributions linked to the higher minimum wage. Altogether, it means my outgoings are rising by thousands of pounds a year.

“Postmasters are constantly told how vital we are to our communities, particularly in rural areas like mine. But if we are to continue providing these essential services, we need meaningful support. That’s why I strongly welcome this call for Government to introduce targeted business rates relief for post offices.”

The current business rates system replaced the previous Retail, Hospitality and Leisure (RHL) relief, which capped the tax at £110,000 per business. This year, 600 additional branches across the UK will become liable for business rates for the first time, and for smaller, rural branches in particular, these changes have meant a four-fold increase in their tax bills in the past few years.

Neil Brocklehurst, Post Office CEO, said: “Post Offices are a lifeline for many communities. There is a structural unfairness in how the tax burden falls across the Post Office network. In reality, most Post Offices are small businesses run independently by postmasters yet are being taxed as if they were large retailers.

“As we set out in our Green Paper response to the Government earlier this year, the unique social contribution that Post Offices deliver in communities should be recognised and protected, and we know the Government recognises this value too. We hope the Government’s upcoming High Streets Strategy will go some way towards levelling the playing field for vital small businesses like Post Offices that continue to provide essential in person services for communities across the UK. Business rates relief is one feasible yet hugely impactful way to do this.”

ENDS

Notes to Editors

* Research from Flint Global commissioned by the Post Office

• Gross Value Added (GVA) is a measure used to estimate the contribution an organisation, sector or region makes to the economy. GVA shows the economic value created by an activity – helping to assess how much it contributes to local growth, jobs and productivity. It is commonly used by policymakers and economists to understand the performance of different sectors and regions across the UK.
• In November 2024, the Post Office launched its Transformation Plan which will deliver a New Deal for Postmasters with an intent to improve Postmaster remuneration by an additional £250 million annually by 2030. In 2025/26, Post Office delivered an additional £86 million to postmasters – a 21% increase on the previous year. Remuneration continues to increase and last month saw the highest monthly remuneration payment to postmasters since 2013.
• Business rates relief would directly benefit the postmasters who operate them. For the many Post Offices that are run by postmasters as small business owners, the business rates bill is a significant strain which only adds to the broader cost challenges facing brick-and-mortar retail businesses today, such as declining High Street footfall and rising operational costs.