Editorial note: this guide explains UK tax in general terms only. It is not financial, tax or legal advice and is not specific to any prize offered by Fortune Games. Tax rules and allowances change and depend on your circumstances, so check GOV.UK or speak to a qualified adviser before acting.
Do you pay tax on competition winnings in the UK?
No. In the UK, competition winnings are tax-free, whether you win cash or goods and whether you entered for free or paid. HMRC treats prizes from competitions, raffles and the lottery as gambling proceeds, which fall outside income tax and capital gains tax. Whether you win 50 pounds or a life-changing sum, you keep the full amount.
Why winnings are tax-free
UK tax law treats prizes won through chance — and most skill competitions entered as a hobby — as windfalls rather than earnings or investment returns. There is no specific tax that applies to them, so there is nothing to pay when you receive the prize and nothing to put on a self-assessment return. This is a long-standing principle and applies equally to a small scratchcard win and a major jackpot.
When tax can still arise later
The prize itself is tax-free, but what you do next can create a tax bill. Interest or investment returns on banked winnings are taxable in the normal way, subject to your personal savings allowance. Selling a prize that has gone up in value can trigger capital gains tax on the gain above your annual allowance, though many goods depreciate and private cars are exempt. And if a valuable prize is still part of your estate when you die, it can count towards inheritance tax.
Records, gifts and non-residents
You do not need to declare winnings, but keeping a confirmation email or claim receipt is sensible in case your bank queries a deposit. Giving large sums away can have inheritance tax implications under the seven-year gifting rules. And if you are not a UK tax resident, your home country may tax the prize differently, so check the rules where you live.
Frequently asked questions
Do I have to declare competition winnings to HMRC?
No. Competition, raffle and lottery winnings are not taxable income, so they do not go on a self-assessment tax return. Keeping a record of the win is still wise.
Is a car or holiday prize taxed?
Not on receipt — the prize comes to you tax-free. You become responsible for running costs, and selling an appreciating prize later could create a capital gains charge.
Is interest on my winnings taxable?
Yes. Once winnings sit in a savings or investment account, any interest or return they generate is taxable under the normal rules and your personal savings allowance.
What if I live outside the UK?
UK winnings are not taxed by HMRC, but a non-UK resident may owe tax at home. Tax treatment depends on your country of residence, so check local rules.
Related guides: Can you sell a competition prize? · Winning a car in a competition · What to do if you win the lottery
18+ only. Gambling should be fun, never a way to make money. Please play responsibly and only with money you can afford to lose. If gambling is affecting you or someone you know, free, confidential support is available 24/7 from the National Gambling Helpline on 0808 8020 133, run by GamCare. You can also visit BeGambleAware (begambleaware.org) or self-exclude from UK-licensed online operators through GAMSTOP (gamstop.co.uk).