Hello, I am Keith, one of the experts on Just Answer, and happy to help you with your question.
Just keep plugging away at HMRC in writing; don't try to use the phone. Not only are there interminable delays, but there is always the chance that in verbal communication the HMRC operative will get hold of the wrong end of the stick if they can even find the stick at all. If it is in writing then you have a hard copy record of what has been discussed. For HMRC to state that 800 quid of over paid tax is due to the estate and then impose a penalty is simply Alice in Wonderland stuff, particularly as HMRC have recently stated that the penalty regime is to be eased.
You simply have to keep writing until your correspondence rises through the hierarchy within the tax office until it reaches an Inspector with rather better knowledge of Income Tax than is currently being displayed. If you, like I have, been faced by an Inspector demanding immediate settlement in cash of tax which was not even due you would appreciate the position. Needless to say the Inspector did not get it and his antics reported to his superiors who immediately withdrew the demand and apologised in writing. So it's back to the word processor!
I do hope that I have shown you the way forward in this matter.