Big brother is watching you (are you watching BB?).
"The only way these people get caught if they are actually get pulled over by the Police whilst driving the untaxed car."
Already happening in various parts of the country, not sure if it's happening everywhere. It used to take a Transit-sized van full of kit. These days an ordinary patrol car with a couple of officers, a hand held camera, a laptop, and a GPRS link is more than enough to do ANPR in realtime, check the tax and insurance in realtime, and check the "wanted list" in realtime (e.g. http://www.guk.co.uk/mobile.html). Meanwhile there'll be a selection of police cars and bikes tucked out of sight not far away, waiting for instructions from the camera vehicle; that aspect of things means it tends to be done sporadically rather than full time.
Additionally, as you may have heard earlier this month, the cops are likely to be given access to ANPR data from official traffic CCTV systems across the UK: http://news.bbc.co.uk/1/hi/uk_politics/6903902.stm
So, yeah, there's a way to catch them, *if* anyone in HQ is really bothered. Mostly though, HQ seem more interested in chasing implausible terrorists, and making the odd fatal mistake.
Back to ANPR: as already noted, cloned number plates are a serious issue, and as already noted there is a simple solution: close the back street number plate shops, to be replaced by a single, properly regulated, source of number plates - which as noted also fixes the illegal spacing/illegal fonts issues. It has to be done soon.