2021 Cost Cap Rumours and Speculation

[DChemTech]

The official statement by the FIA for AMR said that AMR did not gain and advantage. In the same statement by the FIA for RBR, that same line was left out. By omission, the FIA are saying, RBR gained and advantage. FACT

Absence of a certain statement does not prove the contrary of that statement.

[bonjon1979]

Can someone explain to me how RB expected to get this tax break? I can't find the info on it again now but when I first read about the tax break criteria, I thought no F1 team should be getting that break in any way.

They did get the tax break. The FIA say they didn't "apply it correctly". Which means either the amount was wrong, or it was costed to the wrong type of expense or that it was done in the wrong period.

As an example of how the dates can come into play, it is possible they applied for the tax break in June 2021 and that the break should therefore apply to the 21 Cost Cap Financial Year, even if they received the tax break in February 22.

Or it is totally feasible that the error was that they applied it to an expense that was Cost Cap exempt, when it should have been applied within the cost cap.

Of course I doubt that since any team that spies an extra 1.8m to spend will find a way to apply it within the cap. So I suspect they tried to make it apply to this year.

But given that they had the chance to do a dry run, and didn't, and that they had the chance to engage directly with the FIA, and didn't, then this can be classed as gross negligence at best.

That isn’t true. The fia said that the ‘notional’ tax credit was incorrectly applied. Notional means theoretical. There is no confirmation that this was a valid claim or even one that was at all possible.

So to be clear, the tax credit did not exist in actuality at the time of filing and was incorrectly applied.

[RZS10]

Another thought related to this is: did the other teams really go to the very limit or did they give themselves some leeway?

The fact that Aston Martin had multiple points of contention but still stayed under means they left a bit of headroom.

Red Bull handed in a report which was under the cap, which means they left some headroom which simply was not big enough.

There's hypothetical scenarios in which the additional overspend did give them an even bigger advantage to the one from the 400k where the other teams did not go to the very limit in case they would not receive it [edit: the tax break], but we will probably never know since they won't publish their submissions or how much each team actually spent.

Point is: it does not automatically make the advantage from the overspent smaller if RB was actually elligible and should have received the tax break since we don't know whether the other teams were elligible, whether they then included it and whether they stayed a bit away from the maximum allowance under the cap to be safe.

[TimW]

.....
The criteria

Advances in the field
Your project must aim to create an advance in the overall field, not just for your business. This means an advance cannot just be an existing technology that has been used for the first time in your sector.
.......
Show that a professional in the field could not work this out
You should explain why a professional could not easily work out your advance.
.....
I wonder what non-obvious advance in what field RB claimed they had made that isn’t just for their business?
.

This is exactly what I was getting at. How can RB categorically say whatever they are developing is not just for their business? .....

Unless I am very mistaking, the 'create and advance for the field, not just for your business' does not mean that is must be published, it does not need to be 'open source'.

What it means that that is must be something new. If everybody already has active suspension, and you are catching up, that does not qualify. But if you are the first to develop active suspension it does qualify.
Since F1 is considered the most advance racing class, F1 development will probably qualify

The 'show that a professional in the field cannot work this out' is similar. It must not be common knowledge, but something new.

Generally it is quite easy to qualify for such credits, as European countries use them to stimulate the businesses in their country, and give them a competitive advantage over other countries, without formally breaking the state aid rules. So in practice the evaluation is quite lenient.

[SiLo]

.....
The criteria

This is exactly what I was getting at. How can RB categorically say whatever they are developing is not just for their business? .....

Unless I am very mistaking, the 'create and advance for the field, not just for your business' does not mean that is must be published, it does not need to be 'open source'.

What it means that that is must be something new.

Struggling to see what they are doing that is new, especially when there are so many regulations within which they have to build a car?

The lack of other teams commenting on this issue means we don't have much visibility of how applicable it is to any team in the paddock. It might be that all the teams get this pretty much every year.

[a1b2i3r45]

Why wasn’t the term cheating included in the fia report? Why hasn’t Redbull been branded as the cheater? They got a sporting penalty for deliberately breaking a rule to get sporting advantage.

[Dee]

Why wasn’t the term cheating included in the fia report? Why hasn’t Redbull been branded as the cheater? They got a sporting penalty for deliberately breaking a rule to get sporting advantage.

They didn't deliberately do anything as can be seen in the FIA's report

Mercedes however, deliberately broke the engine allocation cap rule multiple times. I can brand them cheaters if you would like?

[mwillems]

Can someone explain to me how RB expected to get this tax break? I can't find the info on it again now but when I first read about the tax break criteria, I thought no F1 team should be getting that break in any way.

They did get the tax break. The FIA say they didn't "apply it correctly". Which means either the amount was wrong, or it was costed to the wrong type of expense or that it was done in the wrong period.

As an example of how the dates can come into play, it is possible they applied for the tax break in June 2021 and that the break should therefore apply to the 21 Cost Cap Financial Year, even if they received the tax break in February 22.

Or it is totally feasible that the error was that they applied it to an expense that was Cost Cap exempt, when it should have been applied within the cost cap.

Of course I doubt that since any team that spies an extra 1.8m to spend will find a way to apply it within the cap. So I suspect they tried to make it apply to this year.

But given that they had the chance to do a dry run, and didn't, and that they had the chance to engage directly with the FIA, and didn't, then this can be classed as gross negligence at best.

That isn’t true. The fia said that the ‘notional’ tax credit was incorrectly applied. Notional means theoretical. There is no confirmation that this was a valid claim or even one that was at all possible.

So to be clear, the tax credit did not exist in actuality at the time of filing and was incorrectly applied.

No it doesn't. It's a tax term and this has been explained on here many times.

The FIA goes on to say that we it is correctly applied the overspend is 400,000 over meaning the overspend has come down by 1.8m. Which is to say that the correct application of the tax credit reduced Red Bulls spend

[TimW]

Why wasn’t the term cheating included in the fia report? Why hasn’t Redbull been branded as the cheater? They got a sporting penalty for deliberately breaking a rule to get sporting advantage.

They didn't deliberately do anything as can be seen in the FIA's report

Mercedes however, deliberately broke the engine allocation cap rule multiple times. I can brand them cheaters if you would like?

It's not cheating if you intentionally break a rule and accept the penalty for it.

[Dee]

Why wasn’t the term cheating included in the fia report? Why hasn’t Redbull been branded as the cheater? They got a sporting penalty for deliberately breaking a rule to get sporting advantage.

They didn't deliberately do anything as can be seen in the FIA's report

Mercedes however, deliberately broke the engine allocation cap rule multiple times. I can brand them cheaters if you would like?

It's not cheating if you intentionally break a rule and accept the penalty for it.

Hypocrite

"Hypocrisy is the practice of engaging in the same behavior or activity for which one criticizes another or the practice of claiming to have moral standards or beliefs to which one's own behavior does not conform. In moral psychology, it is the failure to follow one's own expressed moral rules and principles"

[TimW]

Struggling to see what they are doing that is new, especially when there are so many regulations within which they have to build a car?

The lack of other teams commenting on this issue means we don't have much visibility of how applicable it is to any team in the paddock. It might be that all the teams get this pretty much every year.

"They developed this new vortex generator to modify the airflow and increase downforce."

You have to think along these lines.
Since they did not get slammed by other teams that this tax credit was BS, I'd guess other teams apply for it as well.

[TimW]

They didn't deliberately do anything as can be seen in the FIA's report

Mercedes however, deliberately broke the engine allocation cap rule multiple times. I can brand them cheaters if you would like?

It's not cheating if you intentionally break a rule and accept the penalty for it.

Hypocrite

, just adjusting to the general level of this thread

[MadMax]

Why wasn’t the term cheating included in the fia report? Why hasn’t Redbull been branded as the cheater? They got a sporting penalty for deliberately breaking a rule to get sporting advantage.

They didn't deliberately do anything as can be seen in the FIA's report

Mercedes however, deliberately broke the engine allocation cap rule multiple times. I can brand them cheaters if you would like?

It's not cheating if you intentionally break a rule and accept the penalty for it.

It's not cheating if you do it publicly and in full knowledge of the whole paddock and the FIA et al and in accordance with the rules laid down. Hiding an engine allocation breach would be cheating - changing an engine and saying "we are within the engine allocation limit". I guess that's the correct analogy here.

[littlebigcat]

Yeah and by the definition Red Bull didn’t cheat, because the overspend was in the report submitted.

Doesn’t mean they didn’t gain an advantage from their incompetence though

[Dee]

They didn't deliberately do anything as can be seen in the FIA's report

Mercedes however, deliberately broke the engine allocation cap rule multiple times. I can brand them cheaters if you would like?

It's not cheating if you intentionally break a rule and accept the penalty for it.

It's not cheating if you do it publicly and in full knowledge of the whole paddock and the FIA et al and in accordance with the rules laid down. Hiding an engine allocation breach would be cheating - changing an engine and saying "we are within the engine allocation limit". I guess that's the correct analogy here.

Red Bull hid nothing and did not intentionally go over the cap, Mercedes hid nothing and intentionally went over the cap.

You have to analyse Red Bulls position

The FIA said because they fed RBPT staff, that money should be included.

RB's mistake was thinking the FIA would have common sense and allow them to adjust their budget to only include money spent on people that worked in RBR.

Their downfall was thinking they could change things after when they should have changed things from the start.

The Tax credit was owed to them and if they had been allowed to resubmit, would have reduced their overspend to 400,000. Changing the food allocation would have brought them under the cap entirely.

From 2005 to 2020, there has never been any scandal associated to RBR and I am 100% sure they didn't intend to be over the cap last year. It is not in their nature.