Jeremy Corbyn is planning to almost double the level of tax on thousands of companies across Britain, one of the country's most prominent law firms has warned.

In a briefing for clients, Herbert Smith Freehills said Labour's economic blueprint includes the equivalent of a corporation tax rate of up to 32 per cent, compared to the 17 per cent rate due to come into force next year.

The figures are based on new calculations by the firm showing that Mr Corbyn's planned mandatory share ownership scheme for large companies would cost businesses the equivalent of up to 6 per cent in additional corporation tax. Business leaders had previously warned that the policy would turn investors away from the UK because in many cases existing shares would be significantly diluted.

The City law firm issued the warning to clients as part of a briefing on Labour's domestic policy agenda, including its nationalisation plans, in the face of the "distinct possibility" of an early General Election.

Labour has set out plans for mandatory "inclusive ownership funds" under which all firms with more than 250 employees would have to give workers a financial stake in their companies and a greater say in how they are run. Firms would be required to put 1 per cent of their shares into the fund every year up to a maximum of 10 per cent, with dividends of up to £500 paid out to workers.