englishal
In practice, this sort of thing is (I am told, having rarely asked for or got a penny from a passenger) taken care of by the money changing hands AFTER the successful completion of the flight.
If I was doing PPL cost sharing to anywhere near the permitted limit and the money was being offered before the flight, I would get cheques, not cash.
I am sure a lot of people read this and think it's a load of diatribe. They are care-free and without commitments. When one has a business, or gets older and has kids etc, one becomes aware of the possibility of going bankrupt.
And there is where the real danger lies. The worst the CAA can do is a fine or a jail, and they won't jail you unless you've done something pretty bad.
I think the real problem is insurance, and particularly passenger liability.
If passengers get injured, they may have a big financial incentive to disclose things which were previously agreed to be quiet. They may also have a big incentive to make something up. I bet most people would do exactly that if the stake was big enough.
This is especially true for people who fly with no insurance - not in itself illegal. The passengers have a huge incentive to show the pilot was acting illegally.