Quick answer: No. UK individuals pay 0% tax on lottery, betting and prize competition winnings. GOV.UK lists National Lottery and Premium Bond wins as income you do not pay tax on, and betting and lottery winnings are exempt from Capital Gains Tax. Tax can apply later: to interest your winnings earn, large gifts, or prizes linked to your job.
Key takeaways
- Winning is not taxed: no Income Tax or Capital Gains Tax on a lottery, betting, Premium Bonds or public prize competition win, and nothing to report.
- What you do next with the money can be taxed: savings interest above your allowances, and large gifts if you die within 7 years of making them.
- Prizes tied to work are different: employer incentive draws and business prizes can be taxable, and a foreign country can tax a win made there.
Cash prizes on MrRaffle are paid as tax-free cash, and new players can claim free tickets to try a game first.
Do you pay tax on lottery winnings in the UK?
No. If you win the National Lottery, the Postcode Lottery, a raffle or a bet, the prize is yours in full. GOV.UK's Income Tax guide lists "premium bond or National Lottery wins" among the things you do not pay tax on, and its Capital Gains Tax guide exempts "betting, lottery or pools winnings".
The lottery is still taxed, just not at your end. The National Lottery operator pays Lottery Duty to HMRC at 12% of stake money, so it comes out of ticket sales, not prizes. Other lawful lotteries are exempt from the duty.
| What you won | Tax on the win | What can be taxed later |
|---|---|---|
| Lottery or raffle prize | None | Interest it earns; very large gifts |
| Premium Bonds prize | None | Interest, if moved to a taxable account |
| Bet or casino win | None for ordinary players | Interest |
| Prize competition win, cash or item | None for members of the public | Interest; some valuable items when sold |
| Prize from your employer or through your business | Can be taxable | Depends on the prize |
Do you pay tax on competition winnings?
Not usually. A cash prize or item you win in a prize competition or free draw open to the public is not taxed. HMRC's guidance says prizes become taxable when they are linked to work: a reward for your sales as an employee, a prize for a self-employed agent, or a win that comes through running a business.
HMRC's Business Income Manual draws the line with catalogue prize draws: self-employed agents are taxable on prizes they win, but people "merely purchasing goods for their own use" are "not taxable on any prizes".
Winning an item works the same way: no tax is due when you win it. If you later sell it, the Capital Gains Tax rules for personal possessions apply:
- Cars are exempt, unless used for business.
- Possessions with a lifespan under 50 years, which covers all machinery including watches, are exempt unless used for business.
- Other possessions sold for £6,000 or more, such as jewellery or paintings, can create a taxable gain, but you only pay on total gains above the £3,000 annual allowance.
On MrRaffle, cash competition prizes are tax-free cash paid to your balance. Before you withdraw, you verify your identity: a security and anti-fraud check, not a tax one.
When can a prize be taxable?
When it is really a reward for work. HMRC treats incentive awards as potential employment income and says such schemes "may involve participation in a lottery or prize draw". The award can come from your employer or from a third party with an interest in your work, such as a car maker rewarding dealership staff.
- Employer incentive schemes: cash, goods or holidays for sales, safety or attendance targets, including staff prize draws.
- Business prizes: a prize you receive because of your trade, such as an agent's sales prize, can be a taxable receipt.
- Organised gambling businesses: HMRC says betting "as such" is not trading, even for a skilled punter who lives off it, but an organised operation making profits from the gambling public normally is.
Is the lottery 10,000 a month tax-free?
Set For Life's top prize, £10,000 every month for 30 years, is designed to arrive as at least £10,000 a month after tax. Tax comes up only because the monthly payments come from an annuity, which has a tax-free capital element and a taxable interest element.
The National Lottery says that "in most cases, the top prize is paid tax-free as it is dealt with at source", and top prize winners are offered a meeting with a financial adviser. Our guide to Set For Life odds explains how the prize is paid.
Do you pay tax on interest from your winnings?
Yes, above your allowances. The win is tax-free, but interest it earns in a bank or building society is taxable savings income. Most people can earn some interest tax-free through the Personal Savings Allowance: £1,000 a year for basic rate taxpayers, £500 for higher rate and nothing for additional rate taxpayers.
If your other taxable income is under £17,570, the starting rate for savings can make up to £5,000 of interest tax-free, and interest in an ISA is not taxed at all.
Example: a basic rate taxpayer puts a £100,000 win in an account paying 4% and earns £4,000 in a year. The first £1,000 is covered by the allowance and the other £3,000 is taxed at their usual rate. Interest over £10,000 a year goes on a Self Assessment return.
Premium Bonds sit outside all of this, because NS&I pays prizes, not interest, and every prize is tax-free. See Premium Bonds odds for how often they land.
Can you give lottery winnings away tax-free?
Often, yes, but big gifts come with a 7-year clock. There is no tax when you hand money over, but if you die within 7 years, gifts above your allowances can be counted for Inheritance Tax. Gifts to a spouse or civil partner who lives permanently in the UK, and to charities, are exempt.
Gifts that never count towards your estate:
- up to £3,000 a year in total (your annual exemption), plus any unused amount from the previous year
- any number of gifts of up to £250 per person, if no other allowance is used on that person
- wedding gifts of up to £5,000 to a child, £2,500 to a grandchild or £1,000 to anyone else
- regular payments from your monthly income (not the lump sum itself) that you can afford after your usual living costs
Anything else is tax-free if you live 7 more years. If you do not, and your gifts in those 7 years total more than the £325,000 threshold, the rate on a gift falls the longer ago you made it:
| Years between gift and death | Tax rate on the gift |
|---|---|
| Less than 3 | 40% |
| 3 to 4 | 32% |
| 4 to 5 | 24% |
| 5 to 6 | 16% |
| 6 to 7 | 8% |
| 7 or more | 0% |
Syndicates are a special case. HMRC's Statement of Practice E14 says there is no Inheritance Tax when a lottery or Premium Bonds syndicate shares out a win under an agreement made before the win, ideally written, signed and dated.
Do I have to declare lottery winnings to HMRC?
No. A lottery, betting or competition win is not income, so there is nothing to put on a tax return for the win itself. You may later need to report savings interest above your allowances, or a taxable gain on selling a valuable asset.
Keep proof anyway. HMRC's Enquiry Manual covers checking "claims of non-taxable sources" such as betting wins, so keep your winning notification or claim letter.
What if you win abroad?
In the UK, a win is not taxed as income or as a gain. Abroad can be different: the country where you win sets its own rules and may take tax before you are paid. And if you are UK resident and keep the money in a foreign account, you normally pay UK tax on the interest.
For a large foreign win, check the local rules before you claim. For how UK games compare, see the odds of winning the lottery in the UK.
Frequently asked questions
How much tax do you pay on a lottery win in the UK?
None. A UK lottery prize is paid in full, with no Income Tax or Capital Gains Tax taken off. The 12% Lottery Duty on National Lottery tickets is paid to HMRC by the operator out of ticket sales, so you never see a tax deduction on your prize, however large it is.
Are Premium Bond prizes taxable?
No. NS&I says every Premium Bonds prize, from £25 up to the £1 million jackpot, is free of UK Income Tax and Capital Gains Tax. That tax-free status is a large part of their appeal to higher rate taxpayers, who pay 40% or more on savings interest above their allowance.
Are scratch card winnings taxed in the UK?
No. National Lottery scratchcard prizes are National Lottery wins, which GOV.UK lists as tax-free. An online scratch card win on a prize competition site is a competition prize, which is not taxed for members of the public. See scratch card odds for how those games pay out.
Is money won on MrRaffle taxable?
Cash prizes won on MrRaffle are tax-free cash for UK players, because the UK does not tax prize winnings for individuals. Before your first withdrawal you verify your identity. That check is about security and preventing fraud, and has nothing to do with tax.
Sources
- GOV.UK: Income Tax, introduction, accessed 24 September 2026
- GOV.UK: Capital Gains Tax, what you pay it on and allowances, accessed 24 September 2026
- GOV.UK: Capital Gains Tax on personal possessions, accessed 24 September 2026
- GOV.UK: Possessions with a limited lifespan, accessed 24 September 2026
- GOV.UK: Tax on savings interest, accessed 24 September 2026
- GOV.UK: Income Tax rates and Personal Allowances, accessed 24 September 2026
- GOV.UK: Inheritance Tax, rules on giving gifts, accessed 24 September 2026
- GOV.UK: Lottery Duty, accessed 24 September 2026
- GOV.UK: Tax on foreign income, accessed 24 September 2026
- HMRC: Statement of Practice E14 (syndicate winnings), accessed 24 September 2026
- HMRC Business Income Manual BIM45090: prizes and incentives, tax treatment of recipient, accessed 24 September 2026
- HMRC Business Income Manual BIM22015: betting and gambling, accessed 24 September 2026
- HMRC Business Income Manual BIM22017: the professional gambler, accessed 24 September 2026
- HMRC Employment Income Manual EIM11202: incentive award schemes, accessed 24 September 2026
- HMRC Enquiry Manual EM2076: claims of non-taxable sources, betting, accessed 24 September 2026
- The National Lottery: About Set For Life, accessed 24 September 2026
- The National Lottery: Set For Life Game Specific Rules, accessed 24 September 2026
- NS&I: Premium Bonds, accessed 24 September 2026
Play responsibly
MrRaffle is for UK residents aged 18 and over. Only play with money you can afford to spend, set a budget before you start, and take a break if it stops being fun.
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