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Mis-calculation of holiday entitlement being back dated in pay

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My employer has just notified us at work that they have been mis calculating our holiday entitlement for a while (they say they dont know how long). I work 2 x 10 hour night shifts per week. They are going to back date the difference for 3 years (Ihave been there for nearly 4 years) and pay this with our February pay.

My question is: Am I entitled to ask for this holiday from the last 3 years to be taken in time off, rather than have the money paid to me? I pay very little tax and I know I will lose about 20% of the amount paid in tax, which I wouldnt have done had my holiday entitlement been calculated correctly.

Any help would be much appreciated.

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