What does no deal Brexit mean? What are the consequences for Britain and EU

Tom Herbert

Theresa May has warned that Brits "must prepare" for a no-deal Brexit, with political difference between EU leaders still rife.

With less than 200 days until the UK leaves the EU, concerns are growing that the country will leave the bloc without a deal in place.

Earlier today Mrs May said the two parties remain a "long way apart" on two major Brexit issues, and negotiations have reached an "impasse".

But some hardcore Brexiteers believe that a no-deal Brexit would actually be better than a soft Brexit.

Prime Minister Theresa May speaking in Downing Street (PA Wire/PA Images)

What is a 'no-deal' Brexit, and how would it affect Britain?

The UK is set to leave the EU on March 29, 2019 but there are fears the country could crash out of the block without having secured a formal withdrawal agreement.

The government has until the end of March to secure a deal, but after Mrs May's Chequers plan was rebuffed by European leaders, this is looking increasingly unlikely.

If the country leaves under a no deal scenario, it could have an impact on a whole range of issues for Brits.

Both the EU and the UK have issued guidance on what could happen if a formal withdrawal deal is not in place.

What will happen in the event of a no-deal Brexit?

Dr Simon Usherwood, a reader in politics at the University of Surrey, told the i that when the UK leaves the EU, "everything associated with that would come to an end".

"[A no deal] doesn’t stop the UK leaving but it means there is absolutely no clarity about what happens," he added.

In reality, a no deal scenario would mean there would be no transition period for consumers, businesses and public bodies and they would have to respond immediately to the changes.

This scenario would allow Britain to try and broker trade deals with other countries, but they take years to complete.

Mrs May warned that Brits

But it would mean the country would not be legally obliged to pay the £39 billion divorce bill.

Under the current deal, the UK can only implement trade deals with other countries after the transition period.

The transition period would allow Britain to make new trade deals with the EU but in a no deal situation, there would be no adjustment time to allow for changes in laws or negotiations for trading deals.

Chief Brexit negotiator Michel Barnier rejected the Chequers proposal (AFP/Getty Images)

What affect would a no-deal Brexit have on Britain?

EU nationals living in the UK and UK citizens living in the EU could see their residency rights disappear overnight and become subject to domestic immigration rules.

A no deal Brexit threatens to put pressure the Good Friday agreement, as the EU would want Ireland to impose customs and other checks on its border with Northern Ireland which neither want to do.

Tariffs would be imposed on goods that the UK sends to the EU and the same for goods that the EU sends to the UK. Tariffs on agricultural products could be as high as 60 percent.

Britain would also exit the single market for goods and agriculture which could result in red tape for businesses.

Customs checks at ports would affect the supply of food and goods and there are fears of long queues at borders and disruption to air travel.

Bank of England governor Mark Carney warned that house prices could plummet by a third over three years and that homeowners could be left with negative equity and spiralling mortgage rates.

UK Driving licences may not work abroad, there is no guarantee that there would be free data roaming in Europe and British passport holders could run into difficulty.