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The government will reform and simplify Benchmark Scale Rates (BSR) and Overseas Scale Rates (OSR), which are used by employers to reimburse their employees for domestic and overseas travel and subsistence expenses without the need to check receipts. The new BSR rates will be £20 for periods of travel over 5 hours, £60 for over 10 hours and £75 for over 24 hours. The OSR will be simplified, replacing the 200+ destination-specific OSRs with a simplified tiered approach linked to the updated BSR.
Employers who reimburse employees for domestic and overseas business travel and subsistence expenses using Benchmark Scale Rates or Overseas Scale Rates, and the employees they reimburse.
6 April 2028.
The simplification and modernisation of BSR and OSR is a welcome development. The existing rates have long been regarded as outdated and the destination-specific OSR framework has been a source of administrative complexity for employers. The new domestic rates and the move to a simplified tiered approach for overseas rates should reduce the compliance burden on employers. Employers will await final details of the OSR and will hope that the simplified tiered approach adequately reflects the cost of subsistence in higher-cost destinations.