I am unsure the extent to which the above advice is tongue in cheek.
It is a requirement that you register with HMRC within 3 months of becoming self-employed. If you don't, you may receive a penalty (fine). The details are here.
http://www.hmrc.gov.uk/selfemployed/register-s elfemp.htm
As self-employed, one doesn't have to pay the tax and NI upfront - it will be based on your own self-assessment and payment occurs about 9 months after the end of the tax year (in the first year, at least).
Since she is going to have to pay tax and NI on the earnings anyway, and since the HMRC is pretty wise to the ease with which businesses like hairdressing can be set-up and operate in the black market economy, I can't see any reason not to tell them now.