Where and how did Red Bull breach F1 cost cap? 4 key overspending areas reported

Red Bull's overspending is reported to be spread across four areas. The team is currently involved in discussions with the FIA to settle their cost cap breach dispute.

Post the 2022 Japanese Grand Prix, the team was under "procedural and minor overspend breaches" for the 2021 season. As reported by RacingNews365.com, Red Bull received a call confirming their breach an hour after Max Verstappen's title win at Suzuka. Allegedly, multiple factors pushed the Austrian team $1.8 million over. The first comes from Red Bull paying "Internal costs related to gardening leave and sick pay ($800k) ".

The team's former head of aerodynamics, Dan Follows, resigned in mid-2021 to join Aston Martin. As is customary, Fallows went on gardening leave but was moved across to a business branch of the Austrian outfit. The FIA has factored in Fallows' pay with regard to the cost cap, while Red Bull did not.

The second one comes from overspending on spare parts and a rules re-classification on them. In 2021, the budget total did not include the cost of the car parts that could not make it to the machinery. However, this rule was changed in June 2022, adding them to the budget total.

The third factor has become one of the most talked about points in the cost cap fiasco. The Milton-Keynes-based outfit overspent on its catering costs, adding up to $1.2 million of its total overspend. Some other minor expenses pushed their total toward the cap limit.

The team's significant overspend comes from "potential tax credits and reimbursements from the United Kingdom tax authorities - His Majesty's Revenue and Customs (HMRC)." The Research and Development Expenditure Credit (RDEC) can be claimed by contractors hired by a large R&D firm. This credit can be used to get rid of tax liabilities. However, Red Bull's rebate from HMRC did not materialize, adding $1.4 million to the budget for 2021.

Notably, if the Austrian outfit proves that they were indeed expecting some kind of rebate from HMRC, the FIA could look at this aspect leniently.

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McLaren boss demands heavy punishment for Red Bull after breaching the 2021 cost cap

McLaren CEO Zak Brown wants severe punishment for the Red Bull team after they failed to follow cost cap regulations last year. The team is reported to be in a 'minor breach' which, according to many, might have given them an unfair advantage.

As the FIA continues to settle this matter, Zak Brown penned a note to the authorities and demanded a sporting penalty:

"The overspend breach, and possibly the procedural breaches, constitute cheating by offering a significant advantage across technical, sporting and financial regulations."

Several other team principals have also demanded that strict action be taken against the Milton-Keynes-based outfit. It is safe to say that a fine or lenient punishment will send out a wrong message to others.