Just out of interest - had my car serviced for its first time today and had a bit of an issue getting some warranty work done by the dealer, mainly replacing peeling alloys. Why are dealer reluctant to do waranty work? Do they get less money for it?

Yes they do get a lot less money for it. Also they do not authorise the work. If Skoda wont cover the alloys they they cant change them.

if the wheels are flaking/peeling and there is no damage on them , this should be a manufacturing defect , i.e. a poorly applied finish on the alloy at the factory , getting Skoda to admit to that is another thing altogether ,

we've changed quite a few Mazda alloys for corrosion problems even into the 3rd year of warranty

I had the wheels on my last Fabis VRS replaced under warranty. For a claim to be accepted on the wheels they have to fit this set of criteria

No kerb damage or other scratches on the offending wheel

Original factory tyres, valve and weights.

any wheel/tyre work to have been carried out at a authorised Skoda dealer

If any of these things are different Skoda may claim that the flaking paint is due to poor workmanship/damage by whatever tyre centre you used.

Hope this helps