The inspectors do exist and do knock on doors, but I've never encountered one. You can just refuse to let them in, although if they see you watching live TV through the window, that can count as evidence. They have targets so will tend towards visiting lower-income areas, and places like student housing where there are more people without licences, I live in a middle-class suburb.Thanks for explaining how it all works. Can people refuse the inspections? Also, are there enough inspectors to be able to cover the entirety of the UK? Do businesses like restaurants/pubs have to have a TV license also, or is it just part of their business license?
I get about a letter a month, normally with fake threatening legal language about being taken to court or stuff like "will you be in on February 4?" - it's all scary BS designed to frighten people into paying for a licence. The letters make out that you're breaking the law just by not having a licence. From a quick Google, someone is posting examples of the letters here.
Businesses need a business TV licence. When I went to a local store a few weeks ago to buy a TV for my new house (for YouTube, gaming etc) they could only show demo content on screen because they didn't have a TV licence to show TV programming!