In case anyone is reading this with the problem I had..
My car was produced March 2008 with no phone capability and a Sony radio.
I had no loop cable fitted ( above glovebox 8 pin connector)
Audio-Codierstecker ("Loop"-Stecker) [MK4-Wiki]
I bought the connector and pins from RS Components on the part numbers above and fitted the wires in a BB configuration, this was wrong as that is the configuration for cars with Satnav.
I re wired the connector to pin 1 looped to 5. pin 2 looped to 6. The Microphone now works on my car.
I hope this helps someone, all the information i found was to do with cars with Satnavs.
PS. i have a home made BB 8pin connector (Satnav) if any one wants it!