So you actually were driving on this Roundabout, with your Husband in the passenger seat at the time stated by this person.
It seems to me that she has given the Police your Registration Plate Number and they have traced you through it.
The Police will intervene if someone informs them of a "hit and run".
You definately need to take the letter and your documentation into a Police Station. Tell them that you definately did not hit any car, at all. They will log that you are the person who she is accusing of damaging her car and from then on I think that you have to deal with her and her Insurance.
What could have happened, is that a car, DID clip her car on the roundabout and by the time she got her wits together to look at the Registration on the car, the other car had "took off" and yours was behind it.
So she's mistakenly, blamed you.
Or she's an absolute Scammer and just taken your number and will ask you for X amount so you don't have to claim through your Insurance.
Don't hand any money over before you see the scrape yourself.
It's not going to be easy, although if your Insurance gets involved, they will check that any paint scrape, matches the colour of your car.
Unfortunately, if you do have to contact your Insurance, your premiums will go up.