Do you pay tax on competition winnings UK?

In the UK, most competition winnings are tax-free — good news for lucky winners! Whether you've won a cash prize, a car, or even a luxury holiday, you generally won't have to pay Income Tax or Capital Gains Tax on your prize. That’s because HMRC doesn’t consider competition winnings to be earned income. However, if you sell a high-value prize later (like a car or house), you could be liable for Capital Gains Tax on any profit made. It's always wise to keep records and, if in doubt, consult a tax professional — especially if you're winning regularly or as part of a business venture.