Unfortunately the OP was not travelling on a time restricted ticket, but using a Railcard discount to which they were not entitled to and the Ts&Cs applicable are different.Alter Ego suggests:
I note from the National Rail Conditions of Travel that the remedy for travelling at the wrong time on a time restricted ticket is contained under Condition 9.5:
There is no specific regulation in those about travelling with a discounted ticket before 10am. The nearest I can find is about travelling without a valid railcard and/or ticket:
2.9. If you fail to comply with condition 2.7 and/or 2.8, the Train Company reserves the right to charge you the full price for the single fare applicable to your journey, as if no ticket had been purchased before starting the journey. In some cases you may also be issued with a Penalty Fare.
NRCoT override these, so what do they say?
9.2 If you are unable to present a valid Ticket when asked... 1we are permitted in law to take one of the following measures:
9.2.1 To charge you the full undiscounted “anytime” single fare to a station
directly served by the train that you are on.... or
9.2.3 To report you for prosecution.
If you are unable to present a valid Ticket...you will be required to
provide your name and address so that the matter can be followed up.
1. I would argue that 9.2.1 is applicable here, so the OP should offer £8.50 rather than the difference in fares. That apart, I agree with Alter Ego.
2. I do not use Trainline so cannot comment on whether the OP booked a ticket with a valid pre-10am itinerary (I assume not), or whether the way they used the app could justifiably be considered grounds for prosecution (in which case, does not RoRA 18 apply?).
3. I am unhappy that a letter has been sent without the procedure in the final paragraph being followed.
These last 2 points are only relevant if the OP wishes to defend themself in court.