Thank you.
IMO, your son cannot submit a TE9 - Witness Statement - unless one of the limited grounds applies. These have been set out in their reply.
The only one which could apply is 'Did not receive the NTO', but of course this depends upon whether the NTO was received. The NTO was issued on 30 July, which ties in with their response to the informal challenge dated 8 July. Their letter also refers to '3rd party representations' being made on 30 Aug, which (sort of) ties in with with the NTO (albeit the reps were made late) but these were not disregarded for lateness, but were for invalidity because they were not made by the addressee on the NTO.
If the above is correct, then the NTO was received and a TE9 may not lawfully be made because your son would be making a false declaration and therefore subject to prosecution - this isn't being written to frighten or intimidate, it's the law and I see no reason to sugar-coat this reality.
So, no TE9 = min. charge of £165 unless their offer of paying £55 is accepted.
Others will have views.