Under the party’s plans, income tax would increase to 45p for people earning over £80,000, and 50p for those on more than £123,000. It also pledged not to increase VAT or national insurance, reserving rises for the ‘top 5% of earners’.

According to the Institute for Fiscal Studies (IFS), the proposals will affect approximately 1.3 million people. The think tank further notes the highest-income 2% of adults, or 4% of income taxpayers, receive more than 20% of all taxable income and pay more than 40% of all income tax.

Robert Joyce, associate director at the IFS, warned many in that group of taxpayers would take action to reduce their taxable income in response, for example by increasing pension contributions.

He said: ‘Because the extent of those kinds of responses is very uncertain, the amount of extra revenue these higher tax rates would raise is also very uncertain. Labour’s policy could raise something like the £4.5bn per year it expects, but it could also raise nothing.’

For companies, shadow Chancellor John McDonnell had already trailed a rise in corporation tax from the current 19% to 26%, and a ‘Robin Hood’ financial transactions tax, which would see a 0.5% levy imposed on assets such as bonds and derivatives. Labour hopes the move would curb computer-driven high frequency trading.

The Centre for Policy Studies think tank was highly critical of the proposals on corporate taxation, with director Tim Knox describing them as ‘economically illiterate’.

‘The fact is that cutting the tax rate has coincided with a substantial increase in receipts for HM Treasury. To increase the rates so dramatically at precisely the time when the UK should be striving to establish its international competitiveness and when many other countries are cutting their headline rates – particularly the US – would be suicidal for the UK economy,’ he said.

Labour will also seek to rein in executive pay, with companies paying about £300,000 facing a 2.5% surcharge, rising to 5% for those above £500,000.

Alongside those measures, the manifesto promises to protect small businesses by ‘reintroducing the lower small profits rate of corporation tax’.

In reference to Making Tax Digital, the party says it will ‘exclude small businesses from costly plans to introduce quarterly reporting and take action on late payments’.

Extra resources will also be allocated to HMRC in its battle against tax avoidance. Currently, the tax gap – the difference between tax due and tax collected – runs at approximately 6.5%, or £36bn. Of that figure, tax avoidance represents approximately £2.2bn.

‘Labour will give HMRC the resources and skills necessary to clamp down hard on those unscrupulous few individuals and companies who seek to avoid the responsibilities that the rest of us meet,’ the manifesto stated.

The Labour manifesto can be read here.