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Reclassify
HMRC can reclassify a self-employed sub-contractor to an employee if the sub-contractor can’t prove things like they buy their equipment and safety clothing, that they employ other sub-contractors, or that they work for more than one contractor. HMRC would reclassify the person as employed as they would then be able to collect their VAT through PAYE, rather than through self-assessment or CIS (depending on which one the sub-contractor is using to pay tax). This would also have implications for the contractor employing the sub-contractor, as they would have more responsibilities for that employee, such as holiday pay and pension contributions, as well as the administrative burden of the PAYE.
Remittance Advice
A text or physical note of what a sub-contractor will receive in their pay and what deductions have been made for tax etc.
Risk
Being non-compliant for CIS has many risks, including the possibility of HMRC fining the contractor and sub-contractor for late submission of CIS, fines for the wrong employment status for sub-contractors, a full HMRC investigation and demands for payment of back taxes. Ignorance or misunderstanding of CIS is not an excuse for non-compliance and HMRC regularly checks CIS submissions.

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