F1 budget cap explained: Red Bull's original budget, breach, increased catering cost and more

According to the report by the FIA, Red Bull and Aston Martin have been found to breach the cost cap in the 2021 season, which was set at $145 million. While Aston Martin only had a procedural breach, Red Bull is guilty of a 'minor' overspending of $7.2 million.

The FIA introduced a budget or a "cost" cap in the 2021 season. It limits the amount of money a team can spend during a season of Formula 1 and is supposed to make the sport more competitive. While bigger teams would have to stop spending on their car after a point, it would be fair for the smaller teams. It was planned to be $175 million for 2021, but as the pandemic hit, it had to be cut down to $145 million.

After it was mandated, all the teams followed the cost cap in 2021. However, as FIA started to revise the finances of all teams this year, reports started flying around, blaming Red Bull & Aston Martin for breaching the cap, which inevitably happened. Fans and teams were expecting the team to be disqualified from the past season, and the next closest driver would be crowned as the 2021 World Champion, as Max Verstappen won it with Red Bull. However, it has been believed that the FIA will let them go with a financial fine.

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Red Bull's breach and 'catering' overspend explained

The team released a statement soon enough, saying that they had respected the budget cap and that there was no overspending. They also said a detailed inspection would be set out for the FIA's findings. However, they also blamed the catering services for the team, and said that no extra money was spent on the R&D of the car.

According to the team, a daily free lunch for a thousand people at their Milton Keynes HQ is a significant factor in their accounts of overspending. Although it has nothing to do with the car's development, it counts as the team's overall budget and hence might be the reason for their overspending. However, nothing has been proven.

Analysts believe that if the team can prove that the budget cap was not breached on the R&D of the car, they would be let go with a monetary fine. However, other teams are not satisfied with this. Toto Wolff of Mercedes earlier warned that if the team is let go with a financial fine, they (Mercedes) could breach the cap in the upcoming season, too. Meanwhile, Zak Brown, CEO of McLaren, wrote a letter to the FIA calling out the team for 'cheating' and suggesting a sporting penalty.

Teams are still waiting for the FIA to reveal the penalty that both teams would have to serve for breaching the cost cap.