I know most FRA/fell club members have English Athletics membership as part of that, does this qualify as UK athletics membership or is it something else again?
The situation for Scottish runners is that you need to have individual membership of Scottish Athletics/(UKA?) to avoid paying the levy. It does not matter if you are a member of a club affiliated to Scottish Athletics, its only the individual membership that matters.

So last year I did not pay the levy as I had SA individual membership but some of my club mates would have paid the levy as although they were members of an SA affiliated club they did not have individual membership.

I have SA individual membership as I run the occasional 10k and some cross-country. If you only run in the hills no point in having it as most hill races don't use SA insurance, a requirement of which is the levy.