Superficial Digging into The Tax Man
Rejoice... I think I've worked it out...
If you live in the UK, you are not required to pay income tax on your Flash contest winnings... provided that it's unconnected to your skill and trade. So effectively, if you keep Flash a hobby and follow a career completely unconnected to Web, Games and Design, you're in the clear. Otherwise, by law you've got to send off a Self Assessment form if you earn a total of £6035 or more from all sources in a year (there are higher limits if you're past retirement age... as far as I can tell though, minors are NOT exempted from Income Tax...)
If you live in the US you pay income tax on all contest winnings regardless.
...