I don’t think this will work the way you want with an existing Contest App that I know of.  First you will need to have the entry mechanism in an App where they upload a photo.  Some examples are Easypromos, Offerpop, Wildfire, Strutta and lots more.  But when you upload the photo it goes into the Contest app, not Facebook photos where the tagging could occur.  

You cannot run a contest where the people have to upload the photo to your wall.  But maybe you are talking about doing this all through your app anyway, I’m not sure.  I don’t think the API would allow Facebook tagging on a different picture.  Maybe the developer’s forum would have a good handle on this too.  Hope that helps @sollyjubrail
And actually now that I think about it the promotion rules do state that you can’t require any other Facebook action for entry other than the Like:  http://www.facebook.com/promotions_guidelines.php - see letter E.

Hi guys, thanks for your advice. The goal posts have moved so the mechanic has changed :p

The idea now is to get a user to go to our app/tab, upload a photo of themselves (to our servers) then once we moderate it we will display the photo in a gallery within our app/tab. 

Andrea, I’d love to use Wildfire or something similar but unfortunately security issues won’t allow me to do anything but build it myself. I was looking forward to using Wildfire tbh.
I would like to allow people to tag themselves in the photo once it’s approved and uploaded to the app, and so I was wondering if it is possible to put the photos in an album on our page then display them within the app. I keep reminding myself of the FB T’s&C’s about not using FB features in a competition but I think that because tagging doesn’t effect the winner it should be fine? 
Anyway apologies for the delayed response, I’ve had my head so deep in FB development documentation, forums and wiki’s it’s been hard to come up for air. 
Thanks again guys
Sol.