Formation Flyer
This subject has been raised a number of times and produces similar arguments. Quite why people get so hung up over such trivia I can't imagine.
Why do we log hours in the first place? To ensure we have the minimum experience for licence issue and revalidation. If we are professional pilots its also a check we do not exceed the maximum, but for private pilots, hours over the minimums are of no consequence.
The CAA are simply not interested in how you log it unless its to meet the minimum requirements for licensing purposes.
Don't confuse a test for licensing purposes with one for club purposes. If you take a student up and refuse him an aeroplane on the grounds of his flying ability, its a test. Whilst you can't legally stop him flying, because you don't have the authority, you can still deny him your club aeroplane. As for bending the rules, any test means exactly that; the CAA have indicated they are quite happy, or more to the point, it does not concern them! The various tables they provide are only for guidance. The CAA is a Safety Regulator not a Nanny telling you what to do and okaying every minor move, as many would seem to wish.
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"Interestingly enough if the 'student' is outside the 90 day rule and logs it as P1 then the flight is technically illegal because his licence is not valid for the carriage of passengers."
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Not at all, The pilot is legally rated to fly the aeroplane, he can fly with an instructor, who by definition is not a passenger, and log it as PIS. The instructor being PIC.
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"The only time I think an instructor is totally right in logging command is when he has somebody not rated in that plane manipulating the controls"
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JAR-FCL 1.080 The holder of a flight instructor rating may log as PIC all flight time during which he acts as an instructor.
Remember, the log book is just a personal record of what you did; ART 28 tells you what you must legally record; The CAA tell you what they want for licence issue and revalidation, after that, its down to YOU! All you have to do is use a bit of common sense.