The F1 introduced its first ever financial regulations in 2021 for the season in a bid to level the playing field, know about the F1 budget cost cap explained
Williams was the first F1 team to be fined as a consequence of new cost control measures that were introduced last season.
In 2019, F1 outlined its aim is to, “deliver a more competitive championship, promote a level playing field and ensure the long-term financial stability and sustainability of F1โs 10 teams.”
Explained F1 Budget Cost Cap, Rules, Meaning, Penalty In 2022 Season
As a result due to Covid-19 Pandemic, all teams came together to agree for the cap to be reduced from $175 million to $145 million in 2022 with a further reduction to $140 million for 2022 and then $135 million for 2023 onwards.
Speaking about Cost Cap, it’s a ruling in place to ensure that any teams don’t overspend and stick to a certain budget.
It limits the amount of money one team can spend during a season that relates to the car performance.
F1 has set up a Cost Cap Administration Panel to ensure whether all teams are following the new financial regulations or not. The FIA also carry out visits during the season to ensure it.
In the F1 Cost Cap, all money is included that is spent on a car development to its performance.
However it excludes all the marketing costs, race driver fees/salaries and the costs of the three highest-paid personnel of the team.
Coming back to the question why were Williams fined, the team are the first F1 team to be fined as a result of new cost cap rules.
The team was fined $25,000 following a procedural breach of F1’s regulations. All F1’s 10 teams were required to submit their complete documentation from the 2021 calendar year by the Match 31, 2022 deadline.
However, Williams failed to hit the deadline and this was fined and the team accepted it.
In a statement, FIA said, “Having considered Williams’ explanation and given in particular that the Procedural Breach was voluntarily disclosed by Williams in advance of the Full Year Reporting Deadline of 31 March 2022.
“Williams has been fully cooperative in seeking to remedy the breach, the Cost Cap Administration deemed it appropriate to offer Williams an ABA resolving the breach on the terms set out below. That offer was accepted by Williams.”
The team have since complied with all of the requirements by FIA included, “remediating the Procedural Breach, paid the Financial Penalty, and bore the costs incurred by the Cost Cap Administration in connection with the preparation of the ABA.”
A dramatic rise in inflation has led to a significant increase in costs and development, putting teams budgets under tight strain.
Red Bull team’s boss Christian Horner has also called for a raise in cap to avoid an “accounting world championship.”
He further added, “We’re seeing it in F1, we’re seeing it with logistics, we’re seeing it with energy costs. That to me is something the FIA needs to take into account.
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