The main law governing "obscenity" is the Obscene Publications Act. However, note that there are several other pieces of legislation as well.

Obscene Publications Act

Pornography is regulated mainly by the Obscene Publications Act 1959 which makes it illegal to publish articles which are likely to "deprave and corrupt" a significant proportion of those likely, having regard to all the relevant circumstances, to read, see and hear it. Note that the word "publish" is construed very broadly indeed and includes distributing, circulating, selling, giving, lending, offering to sell or hire, showing, playing, projecting or transmiting. Mere possession though does not fall afoul of the act.
An "article" includes any description of article containing or embodying matter to be read or looked at or both. Sound, film or other record of a picture or pictures constitutes an article. So the act pretty much covers any format including electronic images and Internet imagery.
The test of obscenity is extremely vague. This means there are no hard and fast rules and what is considered obscene by the authorities can change from year to year. Also the "intended audience" can vary dependinging upon, for example, what shelf in a store the material is displayed on.
One effect of this vagueness is that material can be construed obscene or not depending on the political climate of the day without requiring introduction of new legislation.
The 1959 act governs erotica and with the more liberal government that we now have pictures of things like erections, fucking and sucking all seem to be acceptable. The law hasn’t been changed just the test of obscenity is now interpreted more freely.
Where the exact boundary now lies is not cast in stone. I think pictures depicting sexual violence and humiliation, non-consensual sex, extreme sex, animal sex and child sex remain illegal.

Films, Videos and DVD

Films, videos and DVD which are sold in the UK are additionally covered by the Video Recordings Act 1994. All such films have to be submitted to the BBFC for advance certification. The BBFC will then give the film a certificate and most graphic erotica will be given an R18 Certificate. R18 certificated material must be purchased through a licenced sex shop.
The BBFC has become much more liberal in the last few years and now allow most adult material to be certificated as R18 subject to limited controls. The following is not accepted by the BBFC:

violence, humiliation or infliction of pain
depiction of non-consensual sex
material encouraging abusive sexual activity (Child sex or incest)
Depiction of the law being broken eg sex in public
extreme sex

Note that gay threesomes and group sex taking place in in England and Wales was technically illegal until 1st May 2004. Bizarrely films portraying such "illegal acts" were banned by the BBFC even though Scottish and overseas gay threesomes were OK. Happily we are now allowed to see gay threesomes in England and Wales!

Child Pornography
The Protection of Children Act 1978 prohibits taking, distributing, possessing or advertising of an indecent photograph of children under 16. Section 60 Criminal Justice Act 1988 expanded this to make it also an offence for a person to have any indecent photograph or pseudo-photograph of a child in their possession, even if they did not realise that they had the photograph. A pseudo-photograph is a fake photograph which purports to show child pornography.

Importation
If you want to import porn into the UK the rule is "if you can legally buy it here then you can import it". HM Customs & Excise ban the importation of certain prohibited goods which includes pornographic material other than pornography which depicts the type of consensual sexual activity between adults which can be legally purchased in the UK.

Home Videos
Home videos for your own consumption are subject to the rules above. If you intend to sell or distribute your home movie then in theory it must be certificated by the BBFC! Mere ownership of an illegal video is not an offence but bear in mind that home videos on many occasions have been used as evidence by the police of alleged offences committed by the home video owner. So beware!

PRACTICALITIES

Mere ownership of all porn (except child porn) is legal irrespective of whether the material is in fact obscene or has not been certificated. So once you have it in your possession then no crime is committed. Technically if you lent, shared, showed, gave away, sold, swapped or emailed "obscene" porn or uncertificated electronic porn then an offence will have been committed.
Police enforcement tends to focus on commercial producers though. Given how free the law has now become my advice is stick to the legal stuff. It should satiate even the most ardent porn lover and there is no risk of any trouble. Having said that if you have illegal material (barring child porn) then if you just keep it then no offence is committed provided you don’t pass it on to your friends or sell it.
If you have any uncertificated porn where the actors look a bit young the safest thing to do would be to get rid of it. Always remember that porn on your computer is subject to UK law and if you inadvertently download (or just view on the internet) porn with boys who look too young you should delete it and blank your cache -when you view a picture on the internet a copy is kept on your computer. The act of downloading internet pictures onto your computer will of course constitute possession under the Criminal Justice Act 1988.
If you want to import porn check out the R18 videos and DVD’s for sale in Britain and if you import similar stuff then you should be OK.
If you make home movies make sure you don’t film yourself committing offences. for example we not would recommend filming your hot S&M sessions. - See the relevant chapters in the INDEX above right.