She's likely to get away with it. She has broken the law by not informing the National Insurance office that she was self-employed, but if she made a loss she doesn't owe them anything.
If she'd kept proper books and kept the tax man notified, she would have been able to offset her loss against her other income - or carried it forward to offset against her present earnings. That way she'd have got tax relief on her losses, but if she thinks that's a pain that's her problem. Laziness is the usual reason that new business enterprises fail.
