Independent: no vendor pays for coverage · Two-sentence definitions, UK-first · Each term links to the full guide · AI-assisted research, human-checked · How we test · Edited by Annie Vane
This glossary defines the 44 terms you'll meet when choosing, using or checking an AI agent in the UK, from MCP and agentic AI to DPIAs, Articles 22A–22D and the VAT reverse charge. Each definition is two sentences, uses UK law and UK spelling, and links to the guide with the detail. Link to any term with its anchor, for example #mcp.
Last checked: 5 November 2026 · Written by Annie Vane, editor · Evidence: Documentation review
Prepared with AI assistance for research and drafting; every definition was checked by me against its source before publishing. How we test
Cite a definition: AI Agents UK, "UK AI agent glossary", reviewed 5 November 2026, https://aiagents.org.uk/ai-agent-glossary-uk/#[term]. For example: …/ai-agent-glossary-uk/#dpia
Agents and models
AI agent
Software you give a goal to: it plans the steps, uses tools such as email, a browser or your accounts system, checks its own results and keeps going until the job is done or it needs you. A chatbot answers and waits; an agent acts. Full guide
Agentic AI
The broad label for AI that takes actions towards a goal rather than only producing text. It describes a style of system, not a product. Full guide
Chatbot
An AI that replies to messages but doesn't act in other systems on its own. Many chatbots now have agent features bolted on. Full guide
Large language model (LLM)
The AI model that reads and writes text, trained on huge amounts of writing. It's the "brain" inside ChatGPT, Claude, Gemini and most agents.
Open-weight model
A model whose files are published so you can download and run it yourself. "Open-weight" isn't always "open source": the licence may still restrict use.
Prompt
The instruction or question you give an AI. For agents, the prompt usually includes the goal, the rules and the tools it may use.
Token
The chunk of text (roughly three-quarters of a word) that models read, write and charge by. API prices are quoted per million tokens.
Context window
How much text a model can consider at once, measured in tokens. Anything beyond it is forgotten unless the agent stores it somewhere.
Hallucination
When an AI states something false with confidence, such as an invented case citation or statistic. UK courts have referred lawyers to regulators for relying on them. Enforcement tracker
Reasoning model
A model that works through a problem in steps before answering. It's slower and uses more tokens, but is better at planning and maths.
Tools and connections
MCP (Model Context Protocol)
An open standard that lets an AI agent connect to tools and data, such as your calendar, files or CRM, through a common plug. Each MCP server is a door into a system, so vet it like any software. Full guide
Connector
A ready-made link between an AI product and another app, such as Gmail, Slack or Xero. Connectors decide what the agent can see and do.
Agent skill
A packaged set of instructions and scripts that teaches an agent a task. Skills can run code, so check where they come from. Full guide
API
A way for software to talk to software. Developers use a model's API to build their own agents, usually paying per token.
Computer use (browser agent)
An agent that operates a browser or desktop by clicking and typing like a person. Useful where there's no API, but slower and easier to trick.
Prompt injection
A hidden instruction in a web page, email or file that tries to make an agent do something you didn't ask. It's the main security risk for agents with access to your accounts.
Human in the loop
A design where a person approves an agent's important actions before they happen. Under UK GDPR, review must be meaningful, not a rubber stamp.
Running AI on your own computer
Local LLM
A model running on your own machine, which can keep prompts and files off a vendor's servers. That can remove the transfer and processor questions under UK GDPR, though some apps still send telemetry and your own controller duties remain. Full guide
Quantisation
Storing a model's numbers with fewer bits (for example 4-bit) so it fits in less memory, with a small loss of quality. It's why a 27B model can run on a 32 GB Mac. Calculator
Unified memory
Apple Silicon's shared memory, used by both the processor and the graphics chip. It decides which models a Mac can run.
Ollama
Free software for downloading and running local models from the command line or an app. Full guide
UK law and regulation
UK GDPR
The UK's main data protection law, kept from the EU's GDPR after Brexit and amended by UK Acts since. It applies in full to AI agents that touch personal data. Full guide
Data (Use and Access) Act 2025
The Act that changed UK GDPR, including new automated-decision rules from 5 February 2026 and a complaints duty from 19 June 2026. It also raised PECR fines to £17.5 million or 4 per cent of turnover.
ICO (Information Commission)
The UK's data protection regulator. It became the Information Commission on 30 September 2026 and is still known as the ICO. ICO tracker
Controller
The organisation that decides why and how personal data is used, and is responsible for it. If your business uses an AI agent on customer data, you're usually the controller.
Processor
An organisation that handles personal data on a controller's instructions, such as an AI vendor on a business plan. It must be bound by a contract under Article 28.
Data processing agreement (DPA)
The contract between controller and processor setting out what data is processed, why, for how long, and how it's protected. Usually only business AI plans offer one.
DPIA (data protection impact assessment)
A written risk assessment you do before high-risk processing, such as an agent making decisions about people. The ICO says you'll usually need one for automated decisions. Free template
Lawful basis
One of six legal reasons for using personal data under UK GDPR, such as consent, contract or legitimate interests. Write it down before an agent is switched on.
Legitimate interests
A lawful basis that needs no consent but does need a balancing test and a right to object. LinkedIn and Meta rely on it to train AI on UK users' data. How to opt out
Articles 22A–22D
The UK GDPR rules on solely automated significant decisions, in force since 5 February 2026. They allow such decisions with four safeguards: tell people, let them make representations, offer human intervention, and let them contest.
Special category data
Sensitive personal data such as health, ethnicity, religion, sexuality and biometrics. It needs an extra legal condition, and automated decisions on it are tightly limited.
Restricted transfer
Sending personal data outside the UK, for example to a US AI provider. It needs cover, such as the UK–US data bridge, the IDTA or the UK Addendum to EU clauses. Residency tracker
IDTA and UK Addendum
The UK's standard contracts for international transfers: the International Data Transfer Agreement, or an addendum that adapts the EU's standard clauses. Business plans from the big AI vendors usually include one; check the DPA.
Data residency
A vendor's promise about where your data is stored. It usually covers storage "at rest", not every place the data is processed. Residency tracker
PECR
The Privacy and Electronic Communications Regulations, which govern marketing calls, texts, emails and cookies. Automated marketing calls need prior consent, and the ICO hasn't said AI voices are treated differently, so assume they need consent too. AI cold calling
TPS and CTPS
The Telephone Preference Service and Corporate TPS: registers of numbers that don't want sales calls. You must screen against both before live marketing calls.
Equality Act 2010
The law against discrimination on nine protected characteristics. Employers are liable if an AI hiring tool discriminates. AI in recruitment
Buying and billing
Seat
One user's licence on a business plan, usually priced per month. Some plans have a minimum number of seats.
Credits and usage limits
How many messages or tasks a plan allows before you slow down or pay more. Check whether there's a hard spending cap.
Reverse charge
The VAT rule where a UK VAT-registered business accounts for VAT itself on services bought from an overseas supplier. For a fully taxable business it usually nets to zero. VAT guide
Ex VAT
A price excluding VAT; add 20 per cent for what a consumer or non-reclaiming buyer pays. Microsoft shows UK business prices ex VAT. Price tracker
Documentation review
Our evidence label for a guide based on documentation rather than our own test. It gets a written verdict, never a star rating. How we test
Deepfake
AI-generated audio, image or video made to look like a real person. Voice-cloning scams use deepfaked voices to request payments. Protect your business
Changelog
- 5 November 2026: Glossary published with 44 terms.
- Next review: quarterly, and whenever a term changes in law.
Legal terms are summarised in plain English from legislation.gov.uk and ico.org.uk. This is general information, not legal advice. Missing a term? Tell me.
