Do you have Simplink turned on? What happens when you run TV Setup in the Sonos app?

Yes Simplink is turned on, When you run TV setup on App it shows its not connected yet sound play through Arc and i can adjust volume with Sky Q remote.

I have followed all recommendations i can find online

HappyDays
In the LG device connector in the TV "settings/connection" - goto Bluetooth/Soundbars and select HDMI-2 ARC port and go through setup and when you get to the manufacturers page search for/select Sonos as the manufacturer and go onto to complete setup of the universal remote. Power off the TV and then try the Sonos remote control setup again via the Sonos App Arc room settings in Settings/System. See if that works for you.

Thanks Ken but i have tried all that with same result

Have you tried toggling off/on the infrared on the Arc? - admittedly I have the older C9 TV, but the ‘magic remote’ works for me but I had to power off the TV (strangely) to get the Arc to respond to the volume  up press and it was fine after that. 
 

On the Sonos support pages it’s also mentioned to try setting it up with ‘Philips’ as the manufacturer - so maybe try that too.

Thanks Ken, I’ve tried the toggling IR on Arc and also set the device as Philips no change

Will try turning TV of then push the volume up button during set up

HappyDays
Another thought, which may possibly help you to sort it, although I’m not sure if this is possible for your situation... Some TV cable boxes can be programmed to control the attached TV with their IR remote .. entering a code for the make/model of the TV attached to the cable box.

If you can do that with your Sky Box and make its remote control work with your TV, then programme that Sky remote for use with your Arc instead ...and then presumably the LG’s ‘Magic Remote’ (with its same universal remote infrared code setup by the LG connector) will also work… so you can go onto use either the Sky box remote or your Magic Remote… er … perhaps?

I hope that explanation makes sense.