Back in February the U.K.’s Revenue & Customs announced it was looking to raise taxes on private equity people because of perceived “anomalies” – such as light regulation -- that the agency claims let them get rich quick. Now, the British taxman has its eyes on hedge funds and, according to Financial News, hopes to bring in about $1.875 billion in taxes based on unreported profits hedgies made from offshore tax havens. John Neighbour, who left Revenue recently to go work for KPMG, confirmed in an FN interview that his former agency “has a target list” of HF managers, and the investigators are “working their way down the list.” He adds, “They could also look into the personal taxes of individual managers.”

Robert Mirsky, Deloitte’s director of HF services told FN, “I don’t think the Revenue is trying to scare hedge fund managers out of the country” – it just wants to make sure they pay the taxes they owe. The new crackdown doesn’t come as much of surprise to some.

“We had an inkling hedge funds might be targeted,” Jayne Vaughan, a KPMG partner specializing in hedge funds said. “Over the last 12-18 months we have seen ad hoc issues. We believed once Revenue got it act together, it would be a major issue for managers.