If an employee chooses not to take their full annual leave entitlement, same advice if you are the employee.

• They have no statutory right to be paid in lieu for it.
• They have no statutory right to have leave carried forward.

If your employment contracts overrule either of these then you must comply. Consider amending contracts for all new staff and altering existing staff contracts if you are not happy with the conditions. Ensure you obtain legal advice when amending any contract no matter to whom it is intended.

You can permit annual leave to be carried forward, although HMRC does discourage this practice. It is best to have a set limit to avoid staff level problems during busy periods in subsequent years; e.g. five days' leave.

If an employee wishes to take a special extended trip in a subsequent year, e.g. visit relatives in Australia, as the employer, you can override any time limit stipulated within contracts; this may require careful handling as other staff may revolt.