@Kingham
It's signing into the Netflix app on Sky hardware (Q box, Glass television or Stream puck) using the existing Netflix credentials which generates the instruction to transfer billing to the Sky account, which must be either Ultimate TV or Essential TV.
Until this is done, Netflix has no way of knowing that a qualifying Sky subscription is in place.
The default version of Netflix on Sky is 'Standard with Adverts' so you'd then need to add a Netflix 'boost' through the Sky Marketplace to get back up to 'Premium'.
Also note that bundled Netflix doesn't have the Extra Member option.
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Sky Glass 55" (on ethernet) & two Stream Pucks (one ethernet / one WiFi)
BT Halo 3+ Ultrafast FTTP (500Mbs), BT Smart Hub 2
