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Article 21, of the UK Air Navigation Order 2000, states, that a pilot flying in the United Kingdom must hold an appropriate licence granted either by the UK CAA or by a foreign authority and rendered valid under the ANO to fly a UK registered aircraft.
An EASA licence is deemed to be a licence rendered valid under the ANO for this purpose unless the CAA in the particular case gives a direction to the contrary.
A licence issued by any other ICAO Contracting State is also deemed to be valid under the ANO for the purposes of flying a UK registered aircraft, providing that the licence and medical are valid in accordance with the rules/laws of the issuing State, and the CAA does not in the particular case give direction to the contrary.
However, Article 21 (4) (a) states that the holder of such a licence cannot whilst operating in a UK registered aircraft:
1) Act as a member of the flight crew of any UK registered aircraft flying for the purpose of public transport or aerial work or on any flight in such aircraft in respect of which he receives remuneration for his services as a member of the flight crew or to give any instruction in flying; or
2) In the case of a pilot’s licence, act as a pilot of any UK registered aircraft flying in controlled airspace in circumstances requiring compliance with the Instrument Flight Rules .
This in effect means that a holder of a non UK licence may hire and fly a UK registered aircraft on the basis of their own country's licence. However they are confined to VFR flying and cannot enter Class A airspace even though they may hold an Instrument Rating on their licence.
However if a holder of a US (FAA) issued IFR licence hires an N registered aircraft then they may use the full privileges of their licence, though N registered aircraft for hire are rare.
Please note that unlike the USA where Class A airspace starts at 18,000ft, in the UK Class A airspace can exist in some areas as low as 2,500ft amsl. (This is the case around London)