Unpaid leave, holiday leave accrual and tax liability.

[eldar]

Assume you are in a full time job. You ask for, and are granted 4 weeks unpaid leave. No problem, you take it and receive no pay for that period.

During that period, you do not accrue any pension contribution as neither you nor the employer pay. Fair enough.

Do you, though, accrue further holiday during the unpaid leave?

If you don't, no problem.

If you do, is the accrued holiday liable to NI( both employer and employee) and income tax?

If you get 2.5 days holiday per month worked, but get them even with unpaid leave, you've only paid 11/12ths (or thereabouts) of the tax that someone who worked the full year for the same holiday. Is it a taxable benefit, particularly if the difference is between standard and higher rate tax?

Google appear to have no idea..

[eldar]

Thanks for all the comments. The background is that someone too a month and a bit off as unpaid leave, and a couple of others decided it wasn't fair that they got an extra 2.5 days holiday while on holiday, and all sorts of various scenarios why it 'wasn't fair' were constructed. All fairly clearly crap, with with just enough plausibility to sound vaguely possible.

So, sorted, unpaid leave bloke got what was agreed, no tax implications and the wingers can STFU. Peace can return