Cheyne Capital, the UK hedge fund, is being investigated by HM Revenue & Customs in relation to £35.3 million ($56 million) in unpaid taxes, the company has confirmed.

The hedge fund also said it has appealed against the potential liabilities, which concern the account for so-called pay-as-you-earn tax and national insurance contributions between 2004 and 2007.

"We understand that HMRC is looking into a number of financial institutions with similar payment structures,” the hedge fund said in a statement. “Cheyne and our advisors are comfortable with our position and we believe the HMRC inquiry is without merit."

"HMRC cannot comment on individual cases, but there is no specific clampdown on hedge funds,” the UK tax authority said. “It is normal practice for businesses to make provision when tax may be in dispute. Ensuring the right tax is paid at the right time is a fundamental HMRC responsibility."