Originally Posted by
kick the tires
As a PPL(FI) you are operating in a commercial role and taking a student (passenger) flying for reward, whereas as a PPL holder you are operating solely as a private pilot.
You can still fly on a Class 2 as a PPL(FI) but not when exercising the privileges of your FI rating.
the air navigation order states that the holder of a PPL is entitled to fly as pilot in command of any of the types or classes the occupant has on his licence. However, the holder may not receive any remuneration for services as a pilot, accept for towing a glider, dropping parachutists or has a flight instructors rating. A PPL holder with instructor or examiner privileges may receive remuneration for: Provision of flight instruction for the LAPL or PPL, Conduct of skill tests and proficiency checks for these licences; or for the ratings and certificates attached to these licences.
Looking in CAP 804 I cannot see anywhere it states for issue of PPL FI(R) they need a Class 1 nor to exercise privileges.