We tried all sorts bought a new headset, following the instructions on the new head set ended up finding a setting that I didn't know existed, turned it on and hey old headset now works!
1 Go to settings
2 Kinect and devices
3 controller
4 other options
5 volume
6 at top of list is a button to turn mic on
turned it on and and it worked!!
We had never turned the mic off, it just stopped working overnight.
The 30quid for new headset was not a waste as wouldn't have found that setting without it!!