Workers are entitled to 5.6 weeks’ statutory holiday each year. This is made up of an entitlement to four weeks under reg.13 of the Working Time Regulations 1998 (SI 1998/1833) and an additional 1.6 weeks under reg.13A. The four-week holiday entitlement under reg.13 (which derives from EU law) may not be carried forward into the next holiday year (although see below for different rules that apply as a result of the coronavirus (COVID-19) crisis). The position with the additional 1.6 weeks’ holiday under reg.13A is different. Regulation 13A allows for a relevant agreement to provide for any of the additional holiday entitlement to be carried forward into the leave year immediately following the leave year in which it falls due.
However, the Regulations conflict with case law of the European Court of Justice (ECJ), which has held that a worker should be able to take their annual leave at another time if it coincides with a period of sickness. The Court of Appeal in NHS Leeds v Larner  IRLR 825 CA held that the Working Time Regulations 1998 could be interpreted, in accordance with the case law of the ECJ, to allow carry-over of the four weeks’ entitlement under reg.13 if a worker was unable or unwilling to take it because they were on sick leave. In Plumb v Duncan Print Group Ltd  IRLR 711 EAT, the Employment Appeal Tribunal held that, where annual leave is carried over in these circumstances, it must be taken within 18 months of the end of the year in which it accrues.
Many employers also permit any holiday entitlement that has not been taken because of maternity leave to carry over into the following leave year. This solution carries less legal risk than informing an employee that their holiday entitlement has been lost.
The Government has amended reg.13 of the Working Time Regulations 1998 to allow workers to carry over up to four weeks’ annual leave into the next two holiday years, where it has not been reasonably practicable for them to take it as a result of the effects of coronavirus (see When can annual leave be carried over due to the coronavirus crisis?).