Who pays
DFC
You still miss the point. If club X charges £150 for PPL training then that is what they state the charge is. How the incurred operating costs are made up and the level of profit, is the affair of the club. Should the same club charge for pilot self hire £100 then that is also up to them. The customer makes a choice but is not entitled to a breakdown of how they have arrived at their charges.
The two different charges do not have to relate. It could be that one employed instructor is paid £20 per hour but another £15 and yet another £zero. Are you saying that the law states; that the club must charge only the rate they pay the instructor who happens to undertake the flight on top of the advertised self hire rate. I would doubt whether there is a club in the country that is legal in that case.
It remains an interesting legal point whether, should it be discovered a PPL Instructor has been remunerated that the training itself is void - my initial thoughts are that it makes no difference. as whopity has said the instructor is qualified and has taught what he was qualified to do. The prosecution would presumably be for taking the money afterward - not the instruction, a seperate thing.