This from tomorrows Round Town News (paper)

“ACCORDING TO the Chief of the Guardia Civil, those foreign residents that flout the law by driving unregistered, uninsured and untaxed foreign registered cars should be stopped. The statement came after it was announced that a crackdown on foreign registered vehicles, which started late last year in the Costa del Sol, is to be extended nationwide.

“They don’t pay the fines for parking too long in restricted parking zones, or fines for speeding,” said the Chief, “they pay no road tax and their vehicles are often uninsured and not ITV tested. This is wrong and it must be stopped.”

here the ukgov site http://ukinspain.fco.gov.uk/en/help-for-british-nationals/living-in-spain/cars

Thanks Jurdyr - I am a great believer in the UK in Spain site - but even they seem to be struggling with keeping up todate on driving laws - in December they posted:
?There is no need to have a Spanish driving medical certificate (Certificado de Aptitud) if you are driving on a UK licence during its validity or for a replacement Spanish licence when the UK licence expires. If you have received a fine specifically for not having a Certificado de Aptitud, please contact your nearest consulate”

They have today updated their site and removed the paragraph above.

However the big news is that the law has changed on driving licences and going Spanish is mandatory, even before your exisitng one expires - I am having an article published March 1st in TIM, based on research done with Alicante traffico by Pellicer and Heredia, Spanish solicitors in Alicante.
For those who love to research see here
http://www.boe.es/aeboe/consultas/bases_datos/doc.php?id=BOE-A-2009-9481