From this site - http://www.environmentlaw.org.uk/rte.asp?id=49:
In England and Wales, graffiti is considered an act of criminal damage under the Criminal Damage Act 1971 and offenders can be punished with an unlimited fine.
Is it illegal to deface graffiti? For example, spray painting over existing graffiti on a public wall.
By defacing I mean black-boxing, drawing a line through, painting over with the colour of the wall. So not tagging, but just spoiling or covering.