From a
CAA Document:
I have been offered a flight as a passenger during
a trial lesson. Is this legal?
There is nothing in law to prevent the carriage of non-
paying passengers on an instructional flight, apart, of course, from solo flights by a student pilot. If the only
payment made is for carriage of the trainee pilot under instruction, the flight is classed as aerial work, and no
AOC is needed. However, if any passenger has paid to
be carried, the flight is classed as public transport, and
is illegal unless the operator holds an AOC.
The law tells you what you cannot do, not what you can do, so finding it written down this way is as clear as you will ever find it.
but my last school had it clarified as a passenger could be carried, but had to be part of the lesson, ie "learning by observing".
is simply Bull!!!!!