Thank you all for your comments - Herdygirl, I am pretty sure the sheep have been acquired as pets/lawn mowers, not as food. One household already has other livestock purely as pets. The other two sheep have only just appeared but the family give me the impression they'd be into pets rather than raising Sunday lunch.
Fleecewife - I completely understand the reasons for tagging and movement papers, it all makes sense to me. The family who have bred these sheep kept sheep for years and raised them for the freezer so they are fully conversant with the DEFRA regulations! It's a very complex situation for reasons it would take far too long to go into. I always wondered what the situation was officially when you have 'accidental' breeding, after the first two were born. But when 2 more sheep with no tags appeared in the paddock of the new family who have recently moved in, I thought, well first, 'what? Again?' and then maybe there is some way around this that I don't know about. Obviously not!
When the opportunity arises I'll observe what lovely friendly sheep they are (my dog loves them and it's mutual!) but ask casually.. where are their ear tags? I'll see what the reaction is/what they've understood/been told and take it from there.... But at least they can get treatment if the animals are sick, albeit the owners might get reported. I was mainly concerned in case the sheep might suffer. The only thing worrying me now is that the new pair appear to be a boy and a girl.