The Ecuadorian, who won the Giro d'Italia in May, was set to lead the line for Movistar at the eight-day race alongside Mikel Landa.
However, on Friday, the team announced he had been unable to travel to the race after not being able to acquire a visa in time.
"Sadly, and despite the Movistar Team following all procedures, Richard Carapaz's visa for the has not been granted in time for him to travel to the Tour of Britain," read a statement from the team.
Hector Carretero will replace Carapaz in Movistar's six squad line-up. Joining him and Landa are Andrey Amador, Carlos Barbero, Eduardo Sepúlveda, and Carlos Verona.
The Visa issue is the latest disruption to Carapaz's second half of the season. On his return from a post-Giro break, he finished third at the Vuelta a Burgos but was ruled out of the Vuelta a España due to a crash at a publicity criterium in the Netherlands.
He returned to action at the Bretagne Classic last weekend but will now miss eight days of racing at the Tour of Britain. He will need to resolve his visa issues in time for the World Championships, which take place in Yorkshire later this month.
The late-season Italian Classics, including Il Lombardia, may now represent Carapaz's focus for the remainder of the 2019 campaign.
The Tour of Britain begins in Glasgow on Saturday and finishes in Manchester the following Sunday.