The governing body of Formula 1 reported that the Austrian team “excluded and/or erroneously adjusted costs that have a total value of 5,607,000 pounds (about 6.5 million euros)” in the presentation of its Report Annual Financial, exceeded by 1,864,000 pounds (2.1 M€).
What did Red Bull get wrong with F1’s Cost Cap in 2021?
During the day of this Friday, October 28, the FIA pointed out that “according to the investigations of the Cost Limit Administration, Red Bull has recognized that the documentation they presented at the time included some erroneous data.”
So, below are the 13 Red Bull mistakes.
1. Expenses excluded and overestimated in relation to article 3.1 (a) of the Financial Regulation (related to catering services)
This is related to the restoration costs in the factory, and the impossibility of separating the food costs of the employees who do not fall within the limit, such as administration and marketing, and those who do. The FIA insists on including the total of those costs.
2. Costs in relation to article 3.1 (w) of the Financial Regulation regarding the consideration and social security contributions)
This is the exclusion of the costs of an “employee who has been placed on sick leave or indefinite disability”. It is understood that there was an error in relation to the costs incurred by a high-ranking employee who was ill and, at the same time, in a redundancy process.
3. Costs in relation to article 3.1(h)(i) of the Financial Regulations (relating to activities outside of F1), as those costs had already been offset within the total costs.
That rule establishes the exclusions of “all expenses directly attributable to activities that are not related to F1”.
4. Expenses in relation to letter k) of article 3.1 of the Financial Regulation (in relation to premiums and social security contributions)
That rule refers to the exclusion of employee bonuses that Red Bull staff would have received following the success of Max Verstappen at the end of the 2021 season.
5. Underestimation of the relevant expenses with respect to a gain from the disposal of fixed assets by not making the necessary upward adjustment.
The FIA has not given information on which assets were sold.
6. Expenses in relation to article 3.1 (q) of the Financial Regulation (relating to apprenticeship fees)
That rule refers to the exclusion of social contributions and, in this case, it seems that it concerns “trainee staff” working for Red Bull.
7. Expenses in relation to article 3.1 h) ii) i) of the Financial Regulation (related to the consideration and social security contributions)
That rule refers to the exclusion of “social security contributions for any worker who performs both F1 activities and activities outside of F1 itself.”
8. Underestimation of relevant expenses in relation to article 4.1(a)(i) of the Financial Regulation (related to the cost of power units)
That rule states that any “transaction of the power units that is related to an F1 activity must be included in the relevant costs at a value not less than fair.” In 2021, Red Bull received free power units from Honda.
9. Expenses in relation to article 3.1 (h) (i) of the Financial Regulations (related to the consideration and social security contributions)
As in point 3, it is about excluding the costs of activities outside of F1.
10. Underestimation of relevant expenses in relation to Article 4.1(f)(i)(B) of the Financial Regulations (relating to the use of its stocks)
This refers to the allocation of expenses related to unused spare parts and therefore their exclusion from the limit. It is believed to be the most important expense on this list.
11. Administrative error in Red Bull’s calculation of certain expenses that were charged to Red Bull PowerTrains Limited
That refers to the Red Bull Powertrains engine division during 2021.
12. Certain travel expenses according to article 3.1(r) of the Financial Regulations
That rule refers to the exclusion of all competition-related flight and hotel expenses by staff.
13. Maintenance expenses according to article 3.1(i) of the Financial Regulations
That rule refers to the exclusion of “all expenses directly attributable to human resources activities, financial activities or legal activities.”
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