2021 Cost Cap Rumours and Speculation

[MadMax]

So yes, in that sense additional expenses in 2021 can be beneficial for 2022, especially if spent on project 2022. Still, the suggestion that a breach of $400.000 had a decisive impact on the 2021 car and development of the 2022 car hence invalidating two championships, I find that a bit outlandish. It's not that much money.

But $1.8million is quite a lot of money.

[DChemTech]

was the overspend not 1.8 million pound ( 2.2 mill dollars? )?

But $1.8million is quite a lot of money.

Overspend does not mean 'extra development budget' per se.
As noted in one of my posts before, whether or not the $1.4 million related to the tax break actually leads to a development benefit is highly unclear. It depends on what other teams did in this respect, and on what grounds RB did not (yet) get this tax break.

If all teams applied for a tax break and RB was the only one not to get it because they made a clerical error, then this $1.4 million does not benefit RB in terms of development - it just made the season for RB needlessly $1.4 million more expensive compared to competitors. Stupid of them, not affecting development compared to competitors.

If all other teams simply paid for these taxes and allocated them to the cap, and RB did not, hoping on a break they did not get because they were not eligible in the first place, then the $1.4 million does lead to a development benefit for RB.

The communications so far hint that it seems to concern a tax break that RB was eligible to get, and as such it was reasonable of them to factor this in as money that could be spend on other things, but they screwed up with a clerical error. So, my current interpretation regarding that fraction of the breach is 'more expensive season which did not translate into a development advantage'. That may change in light of new information, of course.

[dxpetrov]

So yes, in that sense additional expenses in 2021 can be beneficial for 2022, especially if spent on project 2022. Still, the suggestion that a breach of $400.000 had a decisive impact on the 2021 car and development of the 2022 car hence invalidating two championships, I find that a bit outlandish. It's not that much money.

But $1.8million is quite a lot of money.

Yes, if it's really contributing to cost of car development, not to some auxiliary costs that you thought would not be accounted for and that you could reduce if known they would be.
Wondering if this is pure malice that people don't want to get this or is it just pure illiteracy. Everything was well and fully presented and there is no doubt left that there was no practical breach and the only thing what happened was an admin error that's gonna cost RB money and development time. I'd expect heads to be rolling within the accounting team soon that allowed this cock-up.

[mendis]

TBH, everyone knows deep down, it's not money that gives performance. It's the quality of people, greater understanding of regulations and creative ideation that propels a car.

In that case, the punishment given to Red Bull will have zero effect on their performance.

One wonders why the lesser-funded teams have been unable to win titles against the better-funded teams for so many years if money doesn't bring performance. Or maybe it's because money allows the better-funded teams to pay more for the decent people and thus monopolise on the ideas. Which means, of course, that money gives performance.

Is there a difference between what Mercedes or Red Bull or Ferrari is paying to their staff? Assuming they all have tiered salaries from critical to non critical individuals. Most likely they are in the same ball park. Most of the key staff is settled. Once that is set, where else can you throw money to gain performance?
Hiring people is one time investment. Year on year, it can't become a reason unless there is a mass exodus, taking attrition levels beyond 20% a year (extremely high). But performance differs year on year despite stability of people. More so when regulations change and early life of regulations.
Infrastructure is set, people are set, aero time is set, now where can you throw an extra few millions?

[Mosin123]

was the overspend not 1.8 million pound ( 2.2 mill dollars? )?

But $1.8million is quite a lot of money.

Overspend does not mean 'extra development budget' per se.
As noted in one of my posts before, whether or not the $1.4 million related to the tax break actually leads to a development benefit is highly unclear. It depends on what other teams did in this respect, and on what grounds RB did not (yet) get this tax break.

If all teams applied for a tax break and RB was the only one not to get it because they made a clerical error, then this $1.4 million does not benefit RB in terms of development - it just made the season for RB needlessly $1.4 million more expensive compared to competitors. Stupid of them, not affecting development compared to competitors.

If all other teams simply paid for these taxes and allocated them to the cap, and RB did not, hoping on a break they did not get because they were not eligible in the first place, then the $1.4 million does lead to a development benefit for RB.

The communications so far hint that it seems to concern a tax break that RB was eligible to get, and as such it was reasonable of them to factor this in as money that could be spend on other things, but they screwed up with a clerical error. So, my current interpretation regarding that fraction of the breach is 'more expensive season which did not translate into a development advantage'. That may change in light of new information, of course.

But no individual budgets are assigned, its just one budget for all costs, and i highly doubt the UK tax office gave some thing to every other team ( Even no UK tax paying teams ) a tax GIFT but not Redbull, UK goverment tax offices are very predictable, even if you was declined a first time, if you put your paper work in right before the dead line given on your apeal you will get it, the fact the period in question will cover not one, but 2 UK tax years ( April to April ) leads me to believe this is just a smoke screen, which adds because the FIA thought to name Redbulls defence as still being out side the limit had they got it any way,

you cant just rearrange all the financial aspects of the regs and carefull apply the least performance gaining one at the top, they all come under the same one. no seperate budget for Neways spicy wings.

[Wouter]

So yes, in that sense additional expenses in 2021 can be beneficial for 2022, especially if spent on project 2022. Still, the suggestion that a breach of $400.000 had a decisive impact on the 2021 car and development of the 2022 car hence invalidating two championships, I find that a bit outlandish. It's not that much money.

.
But $1.8million is quite a lot of money.

.
Yes, if it's really contributing to cost of car development, not to some auxiliary costs that you thought would not be accounted for and that you could reduce if known they would be.
Wondering if this is pure malice that people don't want to get this or is it just pure illiteracy. Everything was well and fully presented and there is no doubt left that there was no practical breach and the only thing what happened was an admin error that's gonna cost RB money and development time. I'd expect heads to be rolling within the accounting team soon that allowed this cock-up.

.
RBR has hired accountants from Ernst & Young for this 2021 occasion. Once and never again.

[DChemTech]

But no individual budgets are assigned, its just one budget for all costs, and i highly doubt the UK tax office gave some thing to every other team ( Even no UK tax paying teams ) a tax GIFT but not Redbull, UK goverment tax offices are very predictable, even if you was declined a first time, if you put your paper work in right before the dead line given on your apeal you will get it, the fact the period in question will cover not one, but 2 UK tax years ( April to April ) leads me to believe this is just a smoke screen, which adds because the FIA thought to name Redbulls defence as still being out side the limit had they got it any way,

you cant just rearrange all the financial aspects of the regs and carefull apply the least performance gaining one at the top, they all come under the same one. no seperate budget for Neways spicy wings.

As I said, ifs and buts and we don't know the details.

If all the UK based teams are eligible for a tax break, and all got it except RB because RB themselves messed up the administration and due to that they breached the gap, I don't think you can say RB got a benefit out of that. And this is, to me, what the communications imply happened.

[dans79]

But no individual budgets are assigned, its just one budget for all costs, and i highly doubt the UK tax office gave some thing to every other team ( Even no UK tax paying teams ) a tax GIFT but not Redbull, UK goverment tax offices are very predictable, even if you was declined a first time, if you put your paper work in right before the dead line given on your apeal you will get it, the fact the period in question will cover not one, but 2 UK tax years ( April to April ) leads me to believe this is just a smoke screen, which adds because the FIA thought to name Redbulls defence as still being out side the limit had they got it any way,

you cant just rearrange all the financial aspects of the regs and carefull apply the least performance gaining one at the top, they all come under the same one. no seperate budget for Neways spicy wings.

As I said, ifs and buts and we don't know the details.

If all the UK based teams are eligible for a tax break, and all got it except RB because RB themselves messed up the administration and due to that they breached the gap, I don't think you can say RB got a benefit out of that. And this is, to me, what the communications imply happened.

So you don't think 1.4 million added to any company's budget isn't an advantage?

[Dee]

But no individual budgets are assigned, its just one budget for all costs, and i highly doubt the UK tax office gave some thing to every other team ( Even no UK tax paying teams ) a tax GIFT but not Redbull, UK goverment tax offices are very predictable, even if you was declined a first time, if you put your paper work in right before the dead line given on your apeal you will get it, the fact the period in question will cover not one, but 2 UK tax years ( April to April ) leads me to believe this is just a smoke screen, which adds because the FIA thought to name Redbulls defence as still being out side the limit had they got it any way,

you cant just rearrange all the financial aspects of the regs and carefull apply the least performance gaining one at the top, they all come under the same one. no seperate budget for Neways spicy wings.

As I said, ifs and buts and we don't know the details.

If all the UK based teams are eligible for a tax break, and all got it except RB because RB themselves messed up the administration and due to that they breached the gap, I don't think you can say RB got a benefit out of that. And this is, to me, what the communications imply happened.

So you don't think 1.4 million added to any company's budget isn't an advantage?

It was 400,000 sterling

[mendis]

But no individual budgets are assigned, its just one budget for all costs, and i highly doubt the UK tax office gave some thing to every other team ( Even no UK tax paying teams ) a tax GIFT but not Redbull, UK goverment tax offices are very predictable, even if you was declined a first time, if you put your paper work in right before the dead line given on your apeal you will get it, the fact the period in question will cover not one, but 2 UK tax years ( April to April ) leads me to believe this is just a smoke screen, which adds because the FIA thought to name Redbulls defence as still being out side the limit had they got it any way,

you cant just rearrange all the financial aspects of the regs and carefull apply the least performance gaining one at the top, they all come under the same one. no seperate budget for Neways spicy wings.

As I said, ifs and buts and we don't know the details.

If all the UK based teams are eligible for a tax break, and all got it except RB because RB themselves messed up the administration and due to that they breached the gap, I don't think you can say RB got a benefit out of that. And this is, to me, what the communications imply happened.

So you don't think 1.4 million added to any company's budget isn't an advantage?

If they spend, yes. But if it is sitting in the bank, then no.

[DChemTech]

But no individual budgets are assigned, its just one budget for all costs, and i highly doubt the UK tax office gave some thing to every other team ( Even no UK tax paying teams ) a tax GIFT but not Redbull, UK goverment tax offices are very predictable, even if you was declined a first time, if you put your paper work in right before the dead line given on your apeal you will get it, the fact the period in question will cover not one, but 2 UK tax years ( April to April ) leads me to believe this is just a smoke screen, which adds because the FIA thought to name Redbulls defence as still being out side the limit had they got it any way,

you cant just rearrange all the financial aspects of the regs and carefull apply the least performance gaining one at the top, they all come under the same one. no seperate budget for Neways spicy wings.

As I said, ifs and buts and we don't know the details.

If all the UK based teams are eligible for a tax break, and all got it except RB because RB themselves messed up the administration and due to that they breached the gap, I don't think you can say RB got a benefit out of that. And this is, to me, what the communications imply happened.

So you don't think 1.4 million added to any company's budget isn't an advantage?

That is not at all what I implied. Please read my message again.

[dans79]

It was 400,000 sterling

There is no proof they got the 1.4million credit. If there is then please post it.

[Dee]

It was 400,000 sterling

There is no proof they got the 1.4million credit. If there is then please post it.

It's right there in the FIA statement. 0.37%.

[Dee]

It was 400,000 sterling

There is no proof they got the 1.4million credit. If there is then please post it.

As someone so elequently put it the other day, The FIA look for over and underspending. The told RB that they would have been 1.4 under due to a tax credit if they had filled it out correctly.

[dans79]

It was 400,000 sterling

There is no proof they got the 1.4million credit. If there is then please post it.

As someone so elequently put it the other day, The FIA look for over and underspending. The told RB that they would have been 1.4 under due to a tax credit if they had filled it out correctly.

https://www.fia.com/sites/default/files ... 6.32_1.pdf

The FIA acknowledges that had RBR applied the correct treatment within its Full Year Reporting
Documentation of RBR’s Notional Tax Credit within its 2021 submission of a value of £1,431,348, it would
have been considered by the Cost Cap Administration to be in compliance with Article 4.1(b) of the
Regulations and therefore RBR’s Relevant Costs for the 2021 Reporting Period would have in fact
exceeded the 2021 Cost Cap by £432,652 (0.37%).

https://www.merriam-webster.com/dictionary/notional

1) THEORETICAL, SPECULATIVE
2) existing in the mind only : IMAGINARY
3) given to foolish or fanciful moods or ideas

In other words, They currently haven't received a tax credit. If they had gotten the tax credit, or still had a good chance of it, I have no doubt in my mind that Horner would not have signed an ABA.