Income tax - Refund in pay and no tax taken this month

wesley1414

Hi all,
I have this morning tried to call HMRC but they are on reduced opening hours so I am hoping anyone with income tax knowledge might be able to advise on this.
Losing my job in March due to COVID meaning the business closed entirely, I was on Jobseekers Allowance for this first time ever
In this tax year JSA was active April to end of July (£1236 total when I got another job).

Last month (Aug 25th):
I started my new job at the start of August and got a full month's pay - I am on £25,000 p/a.
I was taxed £187 - expected as per the MSE tax calculator.
My NI and pension were also in line with the calculator.
My tax code for this pay was 1250L (W1/M1).

Then this month (Sept 25th):
I got a tax refund of £187 (which is what I was taxed last month).
I also paid NO TAX this month at all meaning I am up £374 (£187 refund from last month and no tax paid this month).
My NI and pension were the same, as expected.
My tax code for this pay has reverted to 1250L.

Don't get me wrong, it's a lovely surprise - But I am concerned that it's incorrect and I'll get heavily taxed next month or thereafter.
This tax year (2020/2021) I have worked out that (including the JSA of £1236) I should earn just under £18,000 before tax - I have 6 paydays left after the 2 I have already had.
My allowance is £1250 so realistically should only be taxed on approximately £5,500 this year (roughly £1,100)
Due to the refund and not being taxed this month, my Year To Date shows tax paid of £0 - which is correct, I've paid no tax so far.
My Year To Date taxable gross pay is £5,221 (correct for 2 paydays and JSA)

My questions
1. Is this correct first and foremost? 
2. Am I likely to be heavily taxed next month or thereafter for this tax year?
3. I understand that over the course of the year I will be taxed less than if I earned the full £25,000, but why would they refund me and NOT take any tax this month instead of just spreading it out over my remaining paydays? After the August pay I thought they would have figured out what I was on, the August tax was accurate for £25,000 a year.
4. If you have insight, how will the approx. £1,100 tax be taken this year - any thoughts are appreciated.

Sorry to ramble, the extra money would be EXTREMELY helpful after being out of work since March, but I want to be sure that it's actually mine before I plan it into my budget.
Any help is appreciated - I may be pretty good at what I do but what I do is NOT income tax!
Thanks.

Dazed_and_C0nfused

When you are on a cumulative tax code (which you are from September pay) then the tax is deducted on the basis of how much you have earned so far in the tax year.

On tax code 1250L (cumulative) you need to have earned £6,255 before any tax would be deducted in the pay day falling in the tax month to 5 October.

That figure increases by £1,042 each month until pay day in month to 5 April 2021.

Your year to date next month may be in the region of £7,213 by month 7 pay day so again no tax to pay.

In month 8 you will start to pay some tax and by month 9 you will be taxed in the same way as the first pay day when the emergency tax code was operated on a non cumulative basis.

Xbigman

This looks about right to me. You could have earned £6250 so far this year with no tax, and you've only earned £5221, so you should have paid no tax last month or this month and you got your £187 tax from last month refunded.
Next month you should pay an odd amount of tax and then you'll be taxed at the full rate for the remaining 5 months of the tax year. 

They don't spread your remaining tax allowance out over the remainder of the year, they give you the tax allowance evenly through the year and adjust your tax deducted until it comes right, in your case this will be October with full tax deducted in November.  

chrisbur

If you want to check your tax anytime the following calculator will always give the correct answer (provided you put the correct figures in)
It calculates tax in exactly the same way as PAYE is calculated by your employer and will give the correct answer to the penny.
If you have separate gross and taxable gross figures it is the taxable gross figures you should use.

Teapot55

If you can possibly afford it, I’d be inclined to leave the extra money in your current account. It’ll then be a bit of short term ‘rainy day’ money for if you should have anything unexpected happen. 

Always good to have some savings behind you.