You will need to connect the audio from your TV to your AVR 350. Modern models use the HDMI connection with Audio Return Channel, but you will need to provide a separate link.
Most TVs have an optical output, so use this. You may need to keep the optical lead from your Sky box as well to maintain 5.1 audio, but this depends on your TV. Some pass through 5.1 to the optical, some do not.
My plasma is on the wall with cables buried in wall, I don't want a digital cable on show from the plasma (is their another way round this) or will I have to put up with TV sound using internet through my plasma.
Does your tv support bluetooth speakers? My new Samsung does, so possibly you could use a bluetooth receiver with your amp? You may well get lip sync errors however.