I'm struggling to find an answer to this question that should be fairly simple and would massively appreciate some clarity :)
(Numbers are hypothetical to illustrate the point)
Say in a given tax year I earn £50,000 through employment taxed through PAYE as well as £10,000 through self-employment taxed through self-assessment.
Am I correct in saying that my tax-free allowance of £11,500 is used and because total earnings are £60,000 the self-employment income will be taxed at the higher rate of 40%?
It would make sense but it seems a bit bonkers to lose so much self-employment income as to make it almost not worth it.
Can someone please clarify what happens in this situation?