Sorry for the late update on this one, things moved much quicker than I ever expected them too.
Short version of it is that I contacted VWFS, and explained the situation late Friday afternoon, I had a call back on Monday morning to say they are looking into it.
Outcome of that investigation came today at mid day, they agree that the vehicle is defective and it cannot be fixed by Audi. As the vehicle is nearly 2 years old they agreed that they would VT the vehicle and cover the £5K shortfall to that and also refund my deposit I paid for the vehicle once it has been collected.
I did quiz them on why a VT, they explained if they went down the complaints route i.e Consumer law, they would have had to get the dealer involved and it would have taken them weeks / months to resolve which much back and forth.
In fairness to VWFS, they have been extremely reasonable in my opinion, and very quick to act, I genuinely thought i'd be at this for weeks / months not a matter of days....