If you have a driving licence issued within the European Economic Area (all EU countries plus Iceland, Liechtenstein and Norway), you can drive within the UK for as long as your licence remains valid.
If you have a driving licence issued in one of the so-called ‘designated’ countries (listed below), you need to exchange your licence for a British license to be able to drive in the UK for more than 12 months.
The designated countries are: Australia, Barbados, British Virgin Islands, Canada, Falkland Islands, Gibraltar, Hong Kong, Japan, Monaco, New Zealand, Singapore, South Africa, South Korea, Switzerland and Zimbabwe.
If you hold a driving licence issued by any country not listed above, then you will need to pass a British driving test in order to continue driving in the UK beyond the initial 12-month period.
Converting your licence
Foreigners who are permanently resident in the UK and are not required to pass a British driving test (as explained above) may exchange their licence for a British licence. To do so you need to collect an application form (known as a D1 form) from any British post office and send it to the Driving and Vehicle Licensing Agency (DVLA):
DVLA,Swansea SA99 1BT
Any further information you might need about driving in Britain is available on the DVLA’s website: www.dvla.gov.uk.
Check out this useful infographic which is an introduction to driving in the UK.