@hot_chocolate well because you made representations well outside of the discount period, the discount has not been reoffered. This means there's nothing to be put on hold, the penalty is at £160 and that's that. If you appeal and lose the penalty will still be £160, which is exactly the same position you're in now, but you might win. In the circumstances it's a no-brainer to appeal because you have nothing to lose.
I'll drop you a PM in case you'd like me to represent you.