Answers · UK 2025/26
Is a prize from a competition taxable in the UK?
Usually no. Cash prizes and prizes won in a competition of chance or skill are generally not subject to income tax or CGT in the UK, provided you are not trading.
Full answer
HMRC does not generally tax prizes won from competitions, contests, or lotteries in the UK. This is because winning a prize is considered a windfall rather than income from an employment or trade. National Lottery winnings, Premium Bond prizes, and competition prizes are tax-free. However, if you enter competitions regularly with a view to making a profit (for example, as a professional matched bettor or comper), HMRC may deem this a trading activity and tax the prizes as trading income. Similarly, if you win a prize directly connected to your employment (such as a sales incentive award), it may be taxed as earnings. Cash prizes from abroad may be taxable depending on the UK's tax treaty with that country. Any investment income earned from a prize after it has been received is subject to the usual rules (e.g. savings interest on prize money is taxable).
This answer is informational only and does not constitute financial, tax or legal advice. Figures are for the 2025/26 UK tax year. See our methodology and sources.