Revealed: The 13 ways Red Bull overspent in F1 2021
On Friday, the FIA announced Red Bull’s punishment for their minor breach of the F1 cost cap.
The FIA revealed that Red Bull’s breach was $2.2m (£1.86m) or 1.6 percent, but had a tax credit been applied correctly, it would have been only $0.5m (£432,653).
There were 13 areas that were incorrectly interpreted by Red Bull in their submission, including catering, power units and unused parts.
The 13 items in full - listed by the FIA:
1. Overstated excluded costs pursuant to Article 3.1(a) of the Financial Regulations (concerning catering services)
2. Costs pursuant to Article 3.1(w) of the Financial Regulations (concerning consideration and associated employer’s social security contributions)
3. Costs pursuant to Article 3.1(h)(i) of the Financial Regulations (in respect of Non-F1 Activities), as those costs had already been offset within Total Costs of the Reporting Group
4. Costs pursuant to Article 3.1(k) of the Financial Regulations (in respect of bonus and associated employer’s social security contributions)
5. Understatement of Relevant Costs in respect of a gain on disposal of fixed assets by failing to make the necessary upwards adjustment.
6. Costs pursuant to Article 3.1(q) of the Financial Regulations (concerning apprenticeship levies)
7. Costs pursuant to Article 3.1(h)(ii)(i) of the Financial Regulations (concerning consideration and associated employer’s social security contributions)
8. Understatement of Relevant Costs in respect of provisions set forth by Article 4.1(a)(i) of the Financial Regulations (concerning the cost of use of Power Units)
9. Costs pursuant to Article 3.1(h) (i) of the Financial Regulations (concerning consideration and associated employer’s social security contributions)
10. Understatement of Relevant Costs in respect of provisions set forth by Article 4.1(f)(i)(B) of the Financial Regulations (concerning use of inventories)
11. Clerical error in respect of RBR’s calculation of certain costs recharged to it by Red Bull Powertrains Limited
12. Certain travel costs pursuant to Article 3.1(r) of the Financial Regulations
13. Costs of maintenance pursuant to Article 3.1(i) of the Financial Regulations
Red Bull team boss Christian Horner addressed the media ahead of Friday practice for the F1 Mexico City Grand Prix, responding to the FIA’s cost cap verdict and the 13 aforementioned items.
Overspending on unused parts
Horner cited a number of examples of where Red Bull disagreed with the FIA’s judgement which led to their overspend in 2021.
One of them was the topic of unused parts.
It is understood that the FIA issued a clarification to the teams in June - several months after Red Bull’s submission - on how parts are factored into the submission.
Horner explained that had Red Bull been allowed to factor in this clarification, that’d have accounted for £1.2 million.
“Our overspend relates to several areas,” he said.” “One, of course, was the tax. Two was the change to the regulations in June after the submission that had we been allowed to re-submit would have had a benefit to us in the region of £1.2 million in unused parts and the way those unused parts are accounted for, and we believe have been adopted by other teams within their submissions.”
Catering costs
Another area Red Bull overspent on was catering.
Horner explained that Red Bull thought supplying team members and visitors with food was excluded from the cost cap.
“Catering costs - a lot was made of us giving our staff too much food this year. Catering costs, we believed, were excluded, and again, just to put it into context. When we submitted our submission, we were £3.7 million under the threshold.
“Catering within Red Bull has always been a benefit that has been provided by the group. It’s a benefit of working within the Red Bull group - free food and beverage has been provided. Therefore as something as a Red Bull policy we viewed it as an excludable cost. Aggressive, but we felt acceptable.
“The FIA took a different viewpoint on that and said that food was not excludable. Fair enough but what was included was the entire catering bill of the entire company. So £1.4 million was the food, drink, coffees, any of you that attended Milton Keynes during the last 12 months have contributed to our overspend.”
Red Bull Powertrains
In relation to the eighth bullet point outlined by the FIA, there was a disagreement over how Red Bull Powertrains is factored into the team’s submission.
“Red Bull powertrains have nothing to do with Red Bull Racing,” Horner added. “Their costs are included. A difference of opinion on how that was applied.”
Sick pay
Horner defended Red Bull’s overspending on sick pay, another example of where they thought it would be excluded from the cost cap.
“We had a difference of opinion on sick pay,” he explained. “We have always taken a view that we wanted to support our staff in sickness and in health. When members of staff have been on long term sickness we have supported them and we will continue to do so in the future.
“We felt that the sick pay because it had no function in the grand prix team for a period of eight months was an excludable cost. Unfortunately, the regulations can be interpreted in two ways.
“Had the person died, which thankfully they didn’t, the cost would have been excludable. Thankfully they didn’t die but therefore the cost was includable for that sick period.”
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