Does the UK self-employment allowance of £1,000 add up to the Personal Allowance?

Question

I read these pages on gov.uk:

https://www.gov.uk/income-tax-rates
https://www.gov.uk/working-for-yourself

And I understand that there are two types of income allowances:

The Personal Allowance, which has different tax bands, i.e. first £12,500 is tax-free, then it's 20% and so on
The first £1,000 from self-employment, like freelancing or contracting

Does this mean that if I earned £20,000 as an employee and £1,000 as a freelancer, I only pay this amount of tax?

(£20,000 - £12,500) * 0.2 = £1,500

I know that employers automate this process for employees through PAYE, so I only want to make sure that I, as a freelancer, don't have to pay tax on that £1,000?

Alex Ward · Answer

Yes. The allowances are separate.
Your employment income would be taxed via PAYE, and then you’d complete a self assessment tax return and declare your use of the allowance up to £1000 (the amount of allowance used cannot exceed your income from self employment). If your expenses are higher than £1,000, you will not claim this allowance and would instead declare your final expenses.

Does the UK self-employment allowance of £1,000 add up to the Personal Allowance?

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