Okay... here's what's needed to be done (bit of a nonsensical way though! Especially if you ain't Mac savvy!)
It seems that whichever application you are typing in (with Correct as I Type enabled)... you have to go to edit (or right-click), select Spelling, then select the British English language (whereas it's set to English as default)... this for every app! Mail, Safari, whatever... stoopid!