All work and no play…

By law employers must provide full-time employees with at least 24 days' paid holiday per year (rising to 28 days from April next year).

In the past it was possible for all employers to make holiday pay free of National Insurance by using a fund which met the conditions of SI 2001/1004 Schedule 3 Part X paragraph 12.

Since 30 October 2007 this opportunity has been available only to employers whose business includes construction operations paying holiday pay to employees who are personally engaged in these operations.

It continues until October 2012 when the exemption will disappear completely (SI 2007/2905).

The change significantly limits the scope of the exemption but what remains is much wider than might at first be thought.

For example water companies and other utility providers are still eligible because although they are not part...