STEP 1: Open iTunes from your PC. If you don't have iTunes installed, you may want to follow this link to download iTunes on your Computer
STEP 2: Click on "iTunes Store" from the left side panel.
STEP 3: Click on "Great Free Apps" from the right side panel.
STEP 4: Select any of the apps listed in the free apps section.
STEP 5: Click on "Free App" to begin downloading the app.
STEP 6: You will be asked to sign in with your Apple ID. Click on "Create Apple ID".
STEP 7: Click continue.
STEP 8: This is the most important step which will enable you to get a UK based ID. Click on the "click here" button to change your country to United Kingdom. Now check the "I have read and agree to the terms and conditions" and click "Agree".
STEP 9: Provide your personal details and click "Continue". Note: You have to provide a real email id since it will be used for verification.
STEP 10: Select "None" in the Payment Method and fill the areas for Billing Address. Click "Create Apple ID". Note: The billing address don't have to be real. For the postcode section use any valid UK postcode (You can try W11 2BQ for example.)
Troubleshoot: If you do not have the option to select None as a form of payment, go back and select a different free app.
STEP 11: Verify the link that was sent to your email. Congratulations ! You now have a UK iTune account.