Small and rural post offices are facing a sharp increase in business rates bills this year, with the network expected to pay an additional £29 million collectively in 2026/27, according to new research commissioned by the Post Office.
The findings have prompted renewed calls from the Post Office and postmasters for targeted business rates relief, arguing that the current system places an unfair burden on branches that provide essential community services.
Research carried out by consultancy Flint Global estimates that Post Office branches will pay a combined £43m in business rates during the current financial year, representing an almost 200 per cent increase across the network compared with previous years. The average branch is expected to face a bill of around £3,700, while one in four branches will pay more than £5,000 and nearly one in 10 will face charges exceeding £10,000.
The Post Office said the increases stem from the removal of Retail, Hospitality and Leisure (RHL) relief, new property valuations and wider changes to the business rates system. Around 600 additional branches are expected to become liable for business rates for the first time.
According to the research, post offices will pay a higher proportion of their Gross Value Added (GVA) in business rates than the wider retail sector, with the tax accounting for around 10 per cent of the network’s GVA compared with less than 5 per cent for retail overall.
Rural branches are expected to be among the hardest hit. The report found that the average rural post office will face a four-fold increase in its rates bill compared with 2023/24, with smaller branches particularly vulnerable to valuation changes that can significantly increase tax liabilities.
Paul Patel, postmaster at Dibden Purlieu Post Office in Hampshire, said his business rates bill has risen by more than £2,000 in the past year.
“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,” Patel said.
“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.”
Patel added that rural post offices needed greater support if they were to continue providing vital services to local communities.
Neil Brocklehurst, chief executive of the Post Office, said the current system created a “structural unfairness” for the network.
“Most post offices are small businesses run independently by postmasters yet are being taxed as if they were large retailers,” Brocklehurst said.
“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.”
The Post Office is urging governments across all four UK nations to introduce targeted business rates relief for post office branches, supplementing limited support already available in Wales and Northern Ireland.
The call comes as the organisation continues to implement its Transformation Plan, launched in 2024, which aims to increase postmaster remuneration by an additional £250m annually by 2030. The Post Office said it delivered an extra £86m to postmasters in 2025/26, representing a 21 per cent increase on the previous year.
The latest warning also highlights the mounting pressures facing many convenience retailers and post office operators, who continue to grapple with rising employment costs, higher National Insurance contributions and declining high street footfall.