From the Government's BERR website
"Under the Working Time Directive, workers are entitled to take four weeks� paid holiday in any holiday year. As a general rule, the four weeks� holiday should not be carried over to the following leave year, nor should payment in lieu to taking leave be made (except on termination of employment). The increased holiday entitlement is additional to the four weeks� entitlement under the Directive, so there is scope to enable some or all of that leave to be carried over to the following leave year (�carrying over�), or for payment in lieu of taking leave (�buying out�) to be made - until 1 April 2009 when the option for giving payment in lieu ceases.
Contractual entitlement to leave, exceeding the statutory and additional statutory entitlements (4 and 0.8 weeks respectively at present), can be carried over without restriction, as may be provided for by contract."