A growing number of companies are offering their staff the chance not to pay National Insurance on their holiday pay.
Boots the Chemist is the latest of a series of companies to offer the Holiday Pay Scheme to its 60,000 UK employees.
Those signing up are not liable for 11% National Insurance on money paid during 5 weeks holiday and bank holidays.
The scheme started in the 1940s specifically for the building industry, when its many workers moved quickly from job to job and never earned any holiday pay.
Workers picked up a stamp at every job and handed in their book of stamps to gain paid holiday from a central fund.
It was decided that they no longer had to pay this benefit.
Monitoring
HM Revenue & Customs (HMRC) says it is aware of the loophole, which has allowed an increasing number of employers to introduce an updated version of the scheme.
"One of the things that we are all looking for is some clarity around the operation of the scheme"
"There is nothing within legislation to prevent employers outside of the construction industry using these provisions.
"We are seeking information from other providers about their holiday pay schemes as part of our normal policy of continually monitoring and reviewing legislation, to ensure that it is meeting its intended objectives," HMRC told Working Lunch.
WH Smith and Nationwide Building Society are examples of companies that have set up a Holiday Pay Scheme recently.
Not only do Nationwide's 16,000 employees benefit from the scheme, but the company itself saves money on National Insurance contributions.
Clarity
Boots has revealed that an employee on an annual salary of £15,000 will get back around £179 to £240 per year - with people on higher salaries receiving more accordingly.
Other companies were not willing to reveal any financial details of their schemes.
Gary Hull, an employment consultant from PricewaterhouseCoopers, says a rise in the uptake of the scheme will mean a higher cost to the Exchequer, but companies need 'clarity' on how they can use it.
"One of the things that we are all looking for is some clarity around the operation of the scheme so that employers understand what the Inland Revenue are prepared to accept, and employers understand what is not acceptable," he told the programme.
The government's options include officially opening or closing the scheme to all industries, or making it exclusive to the 300,000 workers in the construction sector at present.
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