Is UK a good place to incorporate a porn company?

That's a big no no as it's illegal now to have hardcore site.

no sex please, we're British

You should do it in The Netherlands and give me a job!

Who told you that ?

You need to incorporate where you want to establish banking (normally).
Do you live in the UK?
A corporation has to be represented by its Attorney in most legal courts.
So, if you are domiciling a corporation where you do not live -- get good legal representation in that foreign jurisdiction first.

I hear since the Brexit, many companies are leaving due to taxes & other things, I'd look else where. Many British porn companies are in Cyprus

Is it 'illegal' to make hardcore porn, or illegal to run a website (such as an affiliate website)?

I know there is confusion about this in Australia for example but there seems to be a heap of Australians on here. No idea if there's any producers though.

Neither.

It is not illegal to be in the adult business in the UK.

Creating a Ltd co in the UK is cheap and simple. However some banks wont take your business ( the same in lots of countries ) unless you have a "story" or are able to demonstrate a track record of successful trading thereby lowering the perceived risks levels for the bank.

The issue around legality that is being mistakenly referred to will become a problem for all companies wherever they are in the world when the new Digital Economy Bill becomes law. Basically all adult content that is accessible to UK viewers must be behind an age verification process before it can be viewed.

Non compliant websites and applications will be fined, lose their billing, and / or be blocked.

So it is not illegal to produce or host adult content in the UK, but in the near future age verification for all adult content will become mandatory. No matter what it's origin.

Section 3. Read and weep.

Digital Economy Bill (HC Bill 45)

Now you can say that it wont affect you, but the big players are all over this - regulation breeds opportunity, long term this is good for business.

Adapt or die as they say around here.

Ok i admit i expressed a bit wrong, not illegal but more like restricted.
Meaning, you can run a paysite or anything what have age verification system, but you cant run for example hardcore tube site.

Case closed !!!

As far I know the porn community in the Uk is very small (production wise) and many studios seek out international talent which can get expensive

I live in the UK and run a tube site here bt hosted in america. am I breaking the law? no one told me that bill has come into force yet

No. Bad idea.

Definitely not. The Government is trying to close the UK porn industry. So the money flows out.