The FIA last week announced that Red Bull breached the 2021 Formula 1 Financial Regulations by spending above the cost cap.
Those rules were introduced into the sport for the first time last season in a bid to both level the playing field and also make for a more sustainable economic environment for teams.
Over the Singapore Grand Prix weekend, speculation was rife that Red Bull was in breach, an allegation angrily refuted by team boss Christian Horner at the time.
Following the Japanese Grand Prix, the FIA announced seven of the 10 F1 teams had received Certificates of Compliance with the regulations. The three that did not were Williams, Aston Martin, and Red Bull.
Williams and Aston Martin were found to have made procedural errors, while Red Bull was deemed to have made a ‘Minor Overspend’.
According to RacingNews365, that overspend comes to the tune of $1.8 million on a submission that was $4 million under the cost cap.
That equates to a swing of $5.8 million during the FIA’s auditing process, and it’s understood there are four key areas for the increase.
Among those is approximately $800,000 in payments to staff, including Dan Fallows who departed the team for Aston Martin.
A key member of Adrian Newey’s aerodynamics team, it’s understood Fallows was placed on gardening leave and shuffled over to Red Bull Advanced Technologies while his future at Milton Keynes was decided.
It’s believed the FIA has deemed that the costs incurred as he departed fall within the cost cap, equating to around $400,000, while Red Bull has excluded them.
The other $400,000 is understood to relate to sick leave payments to staff.
Also on the personnel front is a $1.2 million cost for catering, which is viewed as an employment perk.
In much the same way as a gym membership or company car is viewed, the FIA believes the associated cost should have been included within the remuneration package.
Another $1.2 million is related to the reclassification of unused parts developed for the 2022 season.
Originally these were outside the cost cap but a reinterpretation earlier this year saw that cost included.
The rationale was teams had sunk the investment in the research and development of the components whether the part itself was used or not, and so should fall within the cap.
Finally, there is a $1.4 million sum relating to tax credits and reimbursements from His Majesty’s Revenue and Customs (HMRC).
That comes via a Research and Development Expenditure Credit and can be used to offset taxation payments.
It’s understood Red Bull expected a rebate from HMRC which has not been forthcoming, though it’s believed that remains something of a work in progress.
Discussions between the team and the governing body are understood to be ongoing over a resolution to the matter.
The first step is to attempt to reach an Accepted Breach Agreement, essentially an admission of guilt on Red Bull’s part.
Should that not be reached, the matter will go to an Adjudication Panel for a ruling.
Horner is due to front the media as part of the FIA Team Principal’s press conference on Saturday alongside Mattia Binotto (Ferrari) and Zak Brown (McLaren).
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