The HMRC Distraint Notice (EF1) is the process of legally taking possession of goods for sale at public auction to make payment towards (or in full) an unpaid tax bill. Only HMRC and landlords have the ability to do this without the need to go to court. This is not an empty bluff, HMRC can really do this. Because of its simplicity, HMRC are starting to use this other than other debt collection procedures.
What will happen is, an HMRC enforcement officer will come to your home or business without notice to discuss your outstanding tax liability. They will take an inventory of your personal / business assets and issue the HMRC distraint notice (C204) for you to sign. Please remember if you refuse to sign, the HMRC enforcement officer does have the power to seize goods then and there. If you agree to sign, the agreement will be that you have 5 days to pay, or they will be back to seize the goods. Also please remember it is a criminal offence to then sell the assets listed on the C204 until your tax situation is resolved. The enforcement officer can force entry on commercial properties but cannot force entry on residential or mixed residential / commercial properties.
The key is to act fast. If the amount is in dispute, contact the HMRC issuing office and / or your accountant straight away. If you cannot afford to pay, you may be able to enter into a payment plan with HMRC.