Definitive answer here http://www.tvlicensing.co.uk/check-if-you-need-one/topics/what-if-a-tv-licence-is-not-needed-top12/
and you can cancel online now, which you couldn't before :)
That's a pretty good link - more organised and up front than it used to be!!
Basically, if you're using a TV to watch dvds and claiming not to watch live TV, take the following precautions:
1) Make sure that the TV is not attached to any arial/etc (and that a cable that could make the attachment is
not lying suspiciously close to the socket on the back of the TV :lol:).
2) Make sure that every program/channel on the TV is detuned so that even if it was connected, it would take some time to find a TV station.
If you do this, you're far more likely to convince an inspector that you aren't using your equipment to receive live TV :D
This comes from previous experience of friends who managed to exempt themselves about 10 years ago.
Btw, I went a few years without a TV as well (after having one), and they
did not believe that anyone could possibly survive without one - they sent someone round every year to ask whether I had one :lol:. I seem to remember that when I asked them in to have a look they never actually came in, they just wanted to see the whites of my eyes when I was telling them! - but that might be my memory playing tricks.