Red Bull team principal Christian Horner has explained how the team went above Formula 1’s budget cap in 2021.
The FIA announced today that the team had been fined $7m (£6.04m) for the breach and given a 10% reduction in their 2023 aerodynamic test allocation.
Before the FIA’s decision was announced, Horner reiterated that the team’s spending limits were within the limits set by the sport’s governing body. Today the FIA confirmed Red Bull’s bid of £114.293m, with £118.036m in capital.
However, the FIA accused Red Bull of “incorrectly excluded and/or adjusted costs totaling £5,607,000”. Once added, Red Bull overspend by £1.8m.
The FIA had originally planned to issue cost clearance certificates to teams on October 5, but postponed the announcement. Horner was told of his decision four days after Max Verstappen won the championship at Suzuka.
“Ninety minutes after Max Verstappen won the Drivers’ World Championship in Suzuka, I was told that we actually broke the rules by 1.8 million,” said RaceFans at the Autodromo Hermanos Rodriguez today.
“Again, we were surprised that we felt like we were going to disagree with every single point that was made.
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The financial rules determine what costs should be included in the group approach – that is, costs that count against the budget ceiling – and what should not be included. What happened was that Red Bull both failed to fully register items that should have been part of their spending cap submission, and vice versa. Some included costs were excluded and one particularly significant excluded cost was included.
This has to do with paying taxes. FIA “RBR [Red Bull Racing] It has applied the correct treatment in its full year reporting document for RBR’s Notional Tax Credit, which provides a value of £1,431,348 in 2021. It is deemed to comply with clause 4.1(b) of the Price Cap Management Regulations. Therefore RBR related costs for the 2021 reporting period exceed the 2021 cost cap by £432,652 (0.37%).
Horner hammered home the point that the team’s overspending could have been far less than if all the paperwork had been in order.
“The FIA has accepted that there are reasons for deduction specifically for a particular item, basically we have paid a tax amount in the capital,” he explained. “We did not get a £1.4 million tax exemption.
“So when you take that into account, the £1.8m breach is less than the £400,000 that the FIA clearly stated at the time of the release. So the 0.37% violation is basically what we’re talking about.
Horner also believes that Red Bull missed an opportunity to cut costs with unused parts. He suspects that rival teams could take advantage of this opportunity.
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“[There] There was a change in the rules in June after it was submitted that if we had been allowed to resubmit, we would have had £1.2 million of unused units and a benefit in the accounting and handling of those unused units. He explained. “We believe it has been accepted by other groups in their proposals.”
According to the FIA, Red Bull has admitted that it wrongly excluded or adjusted 13 different costs that should have been included. Horner explained that some of this has to do with their food costs, wages and staffing.
“Dining at Red Bull is always a benefit given by the team,” he said. “Working in the Red Bull team was an advantage, there was always free food and drink on offer. So, as per Red Bull’s policy, we treated it as an excludable expense. Aggressive, but we felt accepted.
“The FIA took a different view on that and said that food is not included. fair enough. But included was the company’s entire catering bill. So 1.4 million pounds of food, drink, coffee – you name it. [media] Over the past 12 months Milton Keynes has contributed to our costs. Red Bull Powertrains have nothing to do with Red Bull Racing, this year’s move included costs. So there is a difference of opinion as to how it is implemented.
Red Bull and the FIA also differ on the inclusion of sick pay for healthy workers, Horner said. “We want to support our staff in sickness and in health, and when staff members are ill for a long period of time, we will continue to support that support as we will in the future,” he said.
“Sick pay, we felt it was an excludable expense as his role was no action in the Grand Prix team for eight months. Unfortunately, the rules can be interpreted in two ways.
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One aspect of the rules, Horner outlined, is that “if the person dies, thankfully they don’t die, the cost would be excludable.”
He also questioned whether it was fair to include the salary of a staff member who moved from an F1 team to another division before joining a rival team.
“At one point we had a senior member of staff on contract, a Hollywood-style offer from another team, and at that point you could see their heart and mind was not in your company. They moved from Formula 1 activity to our advanced technology function, which is currently designing the RB17. [road-going hypercar] and America’s Cup projects among many other projects.
“Then the person left the company from there, but the time he didn’t spend in Formula 1 activity was included in the capital. So again, one thing we felt strongly about was the cost that wasn’t included.
Despite disagreement over the inclusion of those items, which Horner believes “maybe three to three-and-a-half million worth of value,” Red Bull has opted to accept the penalty announced by the FIA in an acceptable violation settlement. . He said the alternative is a possible legal negotiation.
“Had we dragged it out through the administrative process, it could have taken months if we had effectively gone to appeal. And then the International Court of Appeal could have taken more months. So we could be looking at 12 months for this to be closed.”
“[With] The amount of speculation and speculation and speculation going on in the paddock, we felt everyone’s desire – our desire, the FIA’s desire, Formula 1’s desire – to say we’re going to close the book here and today. We take the punishment lightly, but we accept them.
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