The FIA has clarified a key part of Formula 1’s Financial Regulations in an update issued to teams last month.
TD45, a technical directive and cost cap administration clarification, provides added detail on how the sport’s governing body interprets the distinction between teams’ F1 activities and non-F1 activities.
The difference between the two is important because non-F1 activities are excluded from teams’ spending under the budget cap. If any team was able to gain benefits for its F1 programme through non-F1 activities, they could gain an advantage from spending outside of the budget cap.
Several teams are involved in businesses outside of F1 and in some cases began doing so long before the budget cap was introduced in 2021. Others formed technology businesses and later sold them.
Mercedes has an Applied Science division which has developed technologies for use in the America’s Cup sailing race. Red Bull’s Advanced Technologies, which supplies both the world champions and AlphaTauri, has contributed to another entrant in the same competition and is developing the RB17 road car. Aston Martin’s comparable division, Aston Martin Performance Technologies, was set up in 2021. No team has been accused of breaking any rules.
However the FIA’s clarification indicates it is alert to the potential for problems to arise in this area. The Financial Regulations are still relatively new. The first submissions made by the 10 teams under it were evaluated last year and led to three penalties for breaches. Red Bull were fined and penalised for over-spending by £1.8 million, and Aston Martin and Williams were fined for procedural breaches.
The Financial Regulations detail a list of costs which may be excluded as part of teams’ non-F1 activities when the expenditure on them can be identified as being separate from their F1 activities. They include costs relating to employees’ social security payments, consumption of electricity, gas and water, use of equipment and costs of parts plus consumables and outsourced services.
F1 teams were due to submit details of their spending during the 2022 season by March 31st this year. Last year the FIA issued certificates of compliance to those whose spending was found to be in line with the cap on October 10th.
FIA president Mohammed Ben Sulayem said this week they are “progressing well with the review of 2022 Financial Regulations submissions.”
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