I doubt this is the right place to discuss this. We have a number of neighbours who have lived here for years and still drive foreign plated cars every day (Poland, Lithuania etc) - and I sincerely doubt they are taxing or insuring the car here. Some cars are in very good condition, almost brand new, while others are clear and obvious MOT failures.
There's no real enforcement or any easy way to identify who has been here for xxx number of days. So, whatever the law is, the fact is the police do bugger all bar the odd sting operation where the media are invited along to show how they're tough on crime.
Besides VED, the real advantages come from the fact that unless you're clamped or towed, you won't get a parking ticket. Nor is it likely that you'll receive a NIP after being caught by a speed camera. I doubt you need to pay the London congestion charge either. Lots of benefits and people are doing it every single day, just as people are still cloning plates to drive into London or avoid points.
The police are just as frustrated about it as we are, I'm sure.
To be fair, we might actually see some changes under this Government - but I am not over confident.