Mac Rencephal

Is someone earns £100,000 from a salary and £500 from bank interest, is their personal allowance reduced (by £500 / 2 = £250) even though the interest is covered by the Personal Savings Allowance (PSA) and therefore no tax is due on it? This means that individual would pay £100 additional tax (£250 reduced allowance at 40% marginal rate) compared to someone reminding £100,000 but with no bank interest, even though the PSA means the bank interest should be tax free. Is this correct?

If I earn £100,000 via salary and an additional £500 in bank interest, is my personal allowance still reduced (by £500 / 2 = £250) even though the interest income is not taxed as it is covered by the PSA?