The law is the law, but it's a pretty archaic and cruel law.
The BBC is known for taking mostly women, single mothers, immigrants and people from the lower strata of society to court and fining them for non-TV licence paying. Those more well off who refuse to pay for reasons other than poverty are mostly left alone.
As for telling them you don't watch live TV, this leads to problems. They tend to want to check this is really so and send someone round to your house to 'inspect.' They have no scruples sending an intimidating man to a woman's house, as these are the people they fine most.
Now you may have a TV for game playing, or for your DVD and feel you a door stop visit is fine. But it's ambiguous, because the person who turns up will simply swish aside any claims that you don't actually watch live TV UNLESS the ariel is not attached, but even there, simply having a means to access a Smart TV via broadband can become an issue. Also, you just might not like strangers who aren't mandated tradesmen, First Responders or Police Officers in your house. You may have strong ideas about your personal liberties.
I've found it best not to respond, and put up with the letters, although personally, they can come and have tea. There's nothing to see.