That letter is typical of the Alice in Wonderland approach to life that the DVLA use. Two options, both of which assume you to be guilty.
It is important to go along with them as far as possible. Write to them, quoting the reg number of the car and the date of their letter and tell them that their letter did arrive and was thrown away as you assumed that was the end of the matter.
Good luck, something similar happened to me I've gone through many letters and telephone convo's and there still chasing me over my Alfa 156. They can get f***ed tbh.