Can anybody offer any constructive advice please?

My daughter was involved in an accident on 29th April last year and her car was declared a write off and removed the following day by her insurance company who took all the documentation and paperwork including the V5.

She tells me that she sent off the section 9 part to inform the DVLA that the vehicle was now transferred to her insurance company and thought that was that as far as the DVLA was concerned.

However, in September, she received a Late Licencing Penalty letter demanding £80, as she hadn't renewed the licence or declared SORN!

She telephoned the DVLA,

(I know, big mistake, she now knows to get everything in writing!)

who claimed to know nothing about the accident or it being written off or that her insurance company had taken the car.

The DVLA followed this call up with a letter dated 12th October,

stating that they had now received the section 9 and acknowledged that she was no longer the keeper of the vehicle but that they still wanted their £80.

However, they said that if she paid before 2nd November, it would be reduced to £40.

This is only 21 days and I was of the understanding that the law states that they should allow her 28 days?

I only found all this out since the penalty has been handed over to a debt collection agency who are now demanding the £80 on behalf of the DVLA.

The DVLA have washed their hands of the matter and will not respond.

The debt collection agency have put things on hold for 30 days.

I am of the opinion that instead of owing the DVLA £80, they owe my daughter £45! (three months refund of her tax) Where do we go from here?