I have a fault code of P1396, and also the engine warning light is on. The vehicle does not ever reach a reasonable running temperature which I assume are linked. I’ve only recently brought the vehicle and the warranty doesn’t cover warning lights so I’m on my own. I’m thinking that it’s possible that the thermostat is at fault as the temperature sensor was recently changed as I have receipts showing that this has been done. Any help would be welcome. The vehicle is a 2004 Octavia vrs. 

The engine should show 90 when up to temp and stay there. Make sure the replacement sensor is OEM and not a copy as they go wrong easily. I would got to TPS or Skoda and buy both Thermo and Sensor and get them replaced.
These could also be old codes so keep a copy and if you got anyone that has VCDS you can get them to scan it for you and see if the problem comes back, with a fault thermo it won't take long.

There are a few VCDS owners on here that could possibly help.

 

I doubt the two issues are related as a quick Google shows that P1396 relates to the engine speed sensor.

 

P1396 Engine Speed Sensor Missing Tooth

Depending what you paid for it and what faults were present when you inspected it before you bought it you might have some recourse with the dealer under your consumer rights. (warranties are in addition to your consumer rights)

 

Sounds like the two problems are not linked, but I would fix the temperature issue first, clear the fault code(s) and then see if they come back.

 

Thermostat is a common issue on cars this old. I fitted a Gates one 5 years ago and it's been fine. As for the CTS, make sure it's a genuine one that was fitted and if not I'd recommend replacing it with a genuine one for peace of mind.