Government failures to prepare for Brexit mean the UK faces “significant disruption” when it is fully free of the European Union on January 1, an official watchdog said on Friday.

The coronavirus pandemic will add to the strain on freight, farming and other economic sectors, especially in Northern Ireland, with or without an EU trade deal, the National Audit Office (NAO) said.

Britain formally left the EU in January but remains bound by its rules under a transition period until the end of this year.

The two sides are currently trying to thrash out a new economic partnership, but Britain's full exit will mean changes either way, in particular customs checks for trucks heading to the EU from British ports.

In a report, the NAO backed up complaints by business leaders who have been warning for months that the government is putting all the pressure on companies to prepare, but failing to do enough itself.

“Even if government makes further progress with its preparations, there is still likely to be significant disruption at the border from January 1 2021 as traders will be unprepared for new EU border controls which will require additional administration and checks,” the NAO said.

NAO chief Gareth Davies said: "The January 1 deadline is unlike any previous EU exit deadline - significant changes at the border will take place and government must be ready."

He added that the situation was all the more challenging because of the Covid-19 pandemic.

The watchdog's report said computing systems have yet to be tested for outbound freight, and transit areas for lorries are not ready.

It said the government had also yet to appoint enough customs agents, despite their "vital" role in ensuring trade flows smoothly from next year.

Under its "reasonable worst-case scenario," the UK government concedes that queues of up to 7,000 lorries could develop in south-east England from January 1 as the post-transition period kicks in.

It says it has ploughed more than £700 million ($920m) into border infrastructure, but business groups say they are hampered especially by the slow rollout of critical IT systems identified in the NAO report.

The auditors also highlighted concerns about checks that will be required for the movement of goods from the rest of the UK to Northern Ireland, which shares a border with EU member Ireland.

Northern Ireland's agriculture department has been "severely hampered" by the ongoing trade talks with Brussels and a "lack of clarity" over the measures required.

As a result, the devolved administration in Northern Ireland is having to explore "contingency options" after January 1, the NAO said.