Hi,
First up, teachers are generally considered to be employees - so when you say teacher, do you mean it in the traditional sense? Who will she be paid by - the community centre or those attending the classes? If it's the centre then she will be an employee.
Say for example a dance instructor who was paid by those attending the classes could set up as self employed and deduct expenses such as room hire etc.
Setting up as a sole trader will not effect her current PAYE position.
The main consideration when setting up as self employed is the obligation to complete a tax return and keep proper books and records.