The issue of the cost cap has become a sensitive topic in F1 following the controversy surrounding the 2021 season. After the FIA had deemed Red Bull guilty of breaching the cost cap, Lewis Hamilton and Mercedes had urged the motorsports governing body to take action against the Milton Keynes outfit. Hence, since this controversy occurred, the FIA has kept a close eye on teams this season. As the FIA continues to examine the team’s finances, F1 expert Joe Saward noted in his blog that one side has found a loophole.
Saward believes that this one team has a questionable business model to save on their expenses. The British journalist’s claims are interesting as it comes at a time when the FIA issued a report to reveal that all teams had met the cost cap for the 2022 season.
How has one F1 team exploited a loophole?
According to Joe Saward, one F1 team has found a loophole to save on taxes. He notes in his blog that he heard that a team has discovered a ruse “to get tax breaks from their government for five years.” Saward notes that this team has found this loophole for their “super-skilled foreign workers.”
“The team can offer (and declare) a lower salary than its rivals, but the employee gets more money because there is no tax to pay…Sneaky, huh? Anyway, the FIA declared that everyone was fine, and so the story is dead, although I am sure some will have a whinge about things in Singapore,” he explained.
Saward makes such a claim at a time when the FIA confirmed that they had “closed” one loophole. The FIA has been constantly monitoring the expenses of all F1 teams to ensure that no side is getting an unfair advantage.
FIA closed one loophole to prevent teams from receiving an unfair advantage
According to motorsport.com, the FIA successfully closed one loophole to prevent teams from using a greater amount of staff than their budgets permit. The FIA confirmed after suspicions had emerged that some teams were attempting to use staff deployed to outside operations but not included as a part of their budget for the season.
“I think what some of the other teams are now doing, the bigger teams, is they’re looking to exploit or have a better understanding of where there’s some loopholes or some organizational changes you can make to actually stuff more people under that budget cap,” an insider told motorsport.com.
The report adds that since the FIA was made aware of the same, they have made greater efforts to examine the costs of all F1 teams. Members of the motorsports governing body have been visiting team factories this season to conduct a “forensic analysis” of each of the team’s finances.
