So was your V5 not up-to-date at the time of the notices they sent out ? As it's £354, they may well take you to the magistrates court, but it would be unusual.
Problem we have on here is the Tyne Tunnel is operated under its own bylaws, it is not a decriminalise operation, hence the magistrates court. Hopefully there may be a regular on here who can help further, or you can try posting on the criminal offences forum.