Deltic
The way I understand it, you need a Class 1 if you're going to get paid, but can instruct on a Class 2 if no money changes hands. If you try and claim the money you get paid is only to cover your expenses you may be on thin ice if the CAA find out.
Looked into this when I recently took my FI test as I didn't want to have to upgrade from a Class 2 just for the test. Only upgraded when the ticket arrived from the CAA. It is a bugger when you get to 40 as I estimate it costs £6 per week just for the medical
ToneTheWone.