Iggly, DS didn't do any phonics before going to school as I didn't want to get it wrong - it's not intuitive unless you've had someone explain it properly, well, not at my age! - and I didn't want to give him bad habits. So he didn't start phonics until the school's nursery class.
As for extending phonics... the problem is that he was getting thoroughly bored with the work because it was too far below his level and frequently repeating stuff he did more than a year ago in the nursery class. So he would be bringing home reading books he brought home in nursery, which really wasn't on because he knew there was more interesting stuff available, and his teacher simply asked for feedback on how he found the different books so she could work out his level.
The problem we've ended up with is that he's a bit of a sponge when it comes to books and he was simply hurtling through them at a rate of knots, working out the words quite happily, and having no trouble with the comprehension side of things, either. So he was finding the ORT stage 5 books too repetitive, stage 7 more interesting but still too easy and thus boring, so the teacher gave him a stage 10 which, despite him saying it's too easy, is what we're going to stick at for a couple of weeks until we see what doing phonics with Y2 does for him.
Yes, we could have kept him on easier books, but he finds his own entertainment if he gets bored, and we were starting to have behavioural issues in class, while at the same time he wasn't getting the full benefit of the ORT system because he wasn't having some concepts supported in class, because they weren't at anything approaching that level of reading yet for the majority. The reason for putting him in with Y2 is that they should be closer to the reading level and thus cover the areas he's not officially been taught, which should hopefully sort out the behavioural stuff as well.
WRT the school knowing the level he'd reached for maths/phonics... the school has a EYU with nursery and reception, that is Ofsted Grade 1, while the Y1-Y6 part of the school is Grade 2. I don't have a problem with that, but the school have been doing some odd things, like giving some of us a report at the end of YR saying our kids had achieved 'most' of the objectives for EYFS in phonics and maths, when we all knew our kids had been romping most of the way through the KS1 syllabus, so there was clearly something amiss. School gate speculation is that they do this to demonstrate improvement from Y1 on, making them out as achieving less in EYFS in order to make the KS1 achievement more remarkable. But I also know from the form teacher that they only sorted out a proper handover about levels in the middle of last week, so frankly quite late into the term. And now they're having to go from 4 ability levels in maths to 2, so those in the YR top set are still not getting taught at the level they reached last year 
bes
Getting the half hour one to one? DS has just gone into Y1, is a late May baby and claims to be finding ORT stage 10 Jackdaws too easy, and his teacher and I believe him because he is genuinely taking it in as well as reading it aloud. Add this to us being in a fairly deprived London borough, he probably stands out more than he might in a different part of the country. I have no steer on whether he's exceptional, because he's an only child and so he's all I know. Call it gifted, bright or anything else, all I know is that I have a happy little boy who loves learning, and I want to keep it that way for as long as possible.
Apologies for the massive post. 
and chocs for anyone who made it this far!