The UK tech sector is charging ahead with AI innovation—but regulation is fast catching up. While the EU AI Act entered into force on August 1, 2024, with requirements applying gradually, the UK is taking a different approach.
Currently, no dedicated AI law is in force in the UK. Instead, the UK government is implementing a pro-innovation, sector-led framework, relying on existing regulators like the ICO, FCA, and CMA to oversee AI risks within their domains.
This approach, outlined in the UK AI Regulation White Paper and its subsequent government response, reaffirms its commitment to a principles-based model. That means companies operating in the UK need to prepare for guidance and enforcement that varies across sectors—but that doesn’t mean a lighter touch.
Top 10 Tips to Help UK Tech Companies Get Ready for AI Regulation
AI is booming in the UK tech sector—but regulation is rapidly catching up. With the EU AI Act now in force and the UK taking a sector-led approach, tech businesses need to stay sharp. Whether you’re building AI systems or using them, now’s the time to prepare. Here are 10 practical tips to help you get started:
1. Regulations are already in place.
The Information Commissioner’s Office (ICO) has issued updated guidance on fairness in AI. The CMA is investigating AI foundation models for competition and consumer risks and published an Update Paper and Technical Update Report in April 2024. The FCA is actively monitoring AI adoption in financial services, applying existing frameworks, and Ofcom will enforce the Online Safety Act as it applies to generative AI tools. Even without a central AI law, regulatory expectations are real—and growing.
2. Accountability and transparency are front and centre.
If your business is using AI in decision-making—especially in hiring, finance, or healthcare—you’ll need to explain how it works, justify outcomes, and ensure human oversight. Data protection, bias mitigation, and auditability are under increasing scrutiny.
3. Cross-border compliance is crucial.
If you’re a UK-based company doing business in the EU, the EU AI Act will apply to you. This includes offering AI systems or services to EU users or operating within the EU market.
To Comply with the EU AI Act, UK Companies Should:
4. Determine if your AI system falls under the Act.
Most obligations apply to “high-risk” systems—like those used in recruitment, credit scoring, or healthcare. These obligations for high-risk systems will become fully applicable from August 2, 2027. Transparency rules also apply to chatbots and generative AI, with specific rules for General Purpose AI (GPAI) models applying from August 2, 2025.
5. Appoint an EU representative.
If you lack an EU presence but serve EU users, you’ll need a legal representative based in the EU for high-risk AI systems and General Purpose AI models.
6. Implement a risk management system.
High-risk systems require testing, documentation, cybersecurity controls, and ongoing monitoring throughout their lifecycle.
Maintain clear technical documentation. You must explain how your model was developed, trained, and tested—including your data governance practices. This documentation must be prepared before the system is placed on the market and updated regularly.
7. Enable human oversight.
Users must be able to understand and, where necessary, override AI decisions. High-risk AI systems must be designed to allow effective human oversight, enabling users to understand capabilities, detect anomalies, and intervene or stop the system. Prepare for CE marking. High-risk systems will need conformity assessments before entering the EU market. The CE marking must be visibly, legibly, and indelibly affixed to the system, packaging, or documentation, with digital CE marking for digitally provided systems.
What Should Companies Do Now?
8. 🧭 Map your AI use. Identify systems used in your business, assess risk levels, and flag any that might fall under UK or EU rules.
9. 📣 Engage with UK and EU guidance. Keep up with evolving interpretations from UK sector regulators and the European Commission.
10. 🔐 Bake in compliance early. Legal, product, and engineering teams should collaborate to embed AI governance into product development—not as an afterthought. This includes conducting documented impact assessments for AI systems, strengthening data governance to comply with UK data protection and IP rules, and maintaining clear audit trails for AI decision-making. While the UK’s approach is decentralised and principles-based, EU compliance adds a second layer of complexity for cross-border companies.
Companies that lead on responsible AI now will be best positioned to scale and earn trust. How is your UK business preparing for AI regulation at home—and abroad?
Get in touch with Martin Donoghue in our Corporate & Commercial team at md@branchaustinmccormick.com to find out how you can be AI ready.
