They're maybe hoping you'll back down with the threat of police action.
Suppose its up to you. A bit of a gamble seeing as your lively hood could be at risk. It all depends on how you think the CPS will see it.
or if indeed they will carryout their threat.
If you are arrested and prosecuted will you have to pay back anything? After all you will have no livelihood to pay for it and besides thats what insurance is for.
Maybe you should text back offering the £80 minus ebay fees and if that is not acceptable its up to them, but point out that in the unlikely chance you are prosecuted they will get nothing as you will have no income to pay any damages, so your current offer is the best they will get. meanwhile change everything you own into someone else name
If you want to be a smartass suggest if they want more money they should claim of their car insurance.