I do not expect to be earning thousands of pounds as I know the threshold is something like 7K before you have to declare tax.
You don't really "declare tax". You declare your income, whatever it may be. Her Majesty's Revenue and Customs decide your tax
The default threshold this year (ending very soon) is actually £9,440. Next year (2014-15) we get a whopping ten grand before the income tax kicks in (there's still NI, mind).
If I am just earning a bit of money here and there occassionally, do I still need to declare it?
Of course. Why on earth would you think you could earn money and not report it? tsk tsk
Also, do I need to fill in forms before I get the work or after? I don't know how it works but surely it will interfere with the tax I already pay in my full-time job as the HMRC will need two different tax codes...
You only have one tax code and that indicates your tax threshold, so it changes every year. Mine is 944L this year, for example.
Assuming simple circumstances, and a desire to keep things simple, you need to register as self-employed within 3 months of first earning money as a freelancer. You should also register for self assessment on HMRC's website (maybe wait until after April).
Next financial year end, you will then need to fill in a section on your income from employment (your employer will provide the figures) and a section on income from self-employment (you'll need to provide the figures!).
HMRC will be delighted to calculate your tax liability for you
(Assuming you earn more than £10k from your employment, and you are on P.A.Y.E, then your employment will use up your whole income tax allowance and you can assume you are paying tax on every penny you earn from freelancing, 20% being the basic rate at the moment.)