When I was taking the Associated Board Exams, I took Grade V Practical Musicianship instead of Theory. At the time, this was a new exam brought in for those, who at the time like me, who were of a more 'practical persuasion'. Worked for me, because I'm not a keyboard player and really struggled with theory. I passed it and went straight onto my Grade VIII trombone. I think they still have this exam. Might be worth looking into.
With regards to the GCSE being equivalent to Grade V theory, its a load of nonsense really. I did both O level and GCSE music and the O level was far more connected to theory than the GCSE. This is why a lot youngsters nowadays can get a qualification in music, and they don't neecessarily have to be able to read or write music. Its handy, but not essential. That was not the case with O level.
I actually teach music now in Secondary schools to 11-16 yr olds. The teacher before me (I was told...) did not really believe in pupils having to read or write notation, prefering computer programs and dance music software. Whilst I think this has its place (and I teach a unit of work around the computer dance programs), it has meant I've struggled teaching what I suppose are the rudiments of music to the kids. However, I am proud to say that all of my yr 7's and 8's can all read music proficiently, and are getting used to writing it properly as well (without the use of Sibelius!)
However, because the GCSE music course does not (in my opinion!) really prepare a pupil for doing standard A level music, my school also offers extra theory lessons as well to any pupils who want them.
Theory definitely has its place, especially if we're not going to allow the basic skills needed for complete musicianship to die out with this generation of computer literate people who can't actually write legibly using a pen or spell their own names properly without spellcheck!
Just my two-penneth!
Charmian. x