So, the police are basically saying that if you don't have a UK-registered car, you can do anything with impunity? I'd file that under astounding.
The 'independent witness' is wonk anyway. I don't know what 'independent' means and witnesses are broadly pointless, more so if you have objective camera evidence.
Years ago, in my only car-related incident in London, where I had a nice slide across a bonnet when a car pulled out in front of me, I watched the driver drop a large joint down a storm drain. I pointed that out to officers at the time. Imagine later, when I asked them about their decision to take no further action that they had 'no record' of drugs and the officers had no reason to 'suspect drugs were involved.' They also seemed quite happy to accept that the driver had 'borrowed' a car that wasn't his and didn't seem to be insured to drive (apparently he'd borrowed it from a friend's garage while his car was fixed and the insurance paperwork had been mixed up, and well, we all believe that don't we?)