Britain is currently scheduled to leave the European Union on October 31.
The date is a contentious issue between the Tory leadership candidates, with Boris Johnson stating he will get the UK out of the EU on Halloween “come what may”.
Meanwhile, Jeremy Hunt has called the date a “fake deadline” and said he would be prepared to extend it if a deal with the EU is in reach.
Q: What is a no-deal Brexit?
A no-deal break means Britain would immediately cease to be an EU member state and would leave the bloc without a formal agreement in place.
Overnight, the UK would cease to be part of the single market and customs unions.
Q: What would that mean for trade?
The legal basis for the free movement of goods between Britain and the EU would disappear, and instead the UK would have to abide by World Trade Organisation (WTO) rules.
That means a new tariff regime as well as new customs and regulatory checks.
Q: Would there be new duties on goods coming into the UK and therefore higher prices?
While still part of the EU’s customs union, British companies can buy and sell their goods freely across the bloc tariff-free.
A no-deal Brexit would change all that – ushering in an era of higher tariffs and an avalanche of red tape, which could make EU goods more expensive and force UK businesses to pass the cost on to customers.
During a recent Tory leadership hustings, Mr Johnson said it is not in the interests “of our friends and partners, I believe, unilaterally to impose tariffs”.
Q: What is Gatt 24?
The General Agreement on Tariffs and Trade (Gatt) is a post-Second World War legal agreement that forms the basis for the trade in goods around the world today. It was replaced by the WTO in the 1990s but the original text is still in use.
Article 24 allows for the creation of an interim agreement necessary for the formation of a customs union or a free-trade area, which could stay in place for up to 10 years.
The international rule is what Mr Johnson says will allow the UK and EU to continue to trade under current arrangements until a new free-trade deal is agreed.
Q: Would Gatt 24 work in a no-deal Brexit?
Mr Johnson has insisted Gatt 24 offers a possible “way forward” with “agreement on both sides”.
However, International Trade Secretary Liam Fox, a Brexiteer who is backing Mr Hunt for the Tory leadership, warned Brussels has made clear no such agreement would be forthcoming.
Bank of England governor Mark Carney has also rejected Mr Johnson’s claims and said that without an agreement with the EU, WTO tariffs would apply “automatically” in the event of no-deal.
Even if the UK and EU agreed to pursue Gatt 24, other WTO members could veto it.
EU Trade Commissioner Cecilia Malmstrom has also said it is “completely wrong” to think Gatt 24 could be used to stop tariffs if the UK leaves the EU without a deal.
Q: How will a no-deal Brexit work at the border?
Until it actually happens, no-one can be quite sure.
There are concerns many firms – particularly smaller traders – are still not properly prepared for dealing with the new procedures. That has raised fears of long tailbacks of lorries at the Channel ports, at least in the short-term.
There will be new checks on livestock and food products being exported from the UK into the EU as Britain may no longer be considered compliant with EU regulatory standards.
Q: Will there be an impact in the shops?
With around 30% of the UK’s food imported from the EU, supermarkets have warned of higher prices and empty shelves in the event of no-deal.
Mr Carney has previously said there could be a hike of 5%-10% in food prices, while there are concerns about the impact on the supply of perishable goods if no-deal results in delays at the border.
Tariffs could add around £1,500 to the price of a typical car imported from the EU.
Q: What about medicines?
The NHS imports large quantities of drugs and medical equipment from the EU and there are concerns about the impact of no-deal on costs and on complex supply chains.
Ahead of the initial Brexit date in March, before it was extended to October, pharmaceutical companies were urged to stockpile six weeks worth of essential medicines as part of measures to ensure patients continue to get the drugs they need.
Extra shipping capacity was secured and warehouses with refrigeration facilities rented to store medicines, while arrangements were made to fly in those which cannot be stockpiled.