Formula 1: What is the budget cap? What are the punishments for breaking it? When will the FIA announce decision?

A cost cap of $145m (£114m) was introduced last year as Red Bull’s Max Verstappen claimed the World Drivers’ Championship in a highly-contentious season finale in Abu Dhabi while Mercedes were crowned constructors champions.

Teams were due to be handed certificates on Wednesday, October 5, but that has now been pushed back until after this weekend’s Japanese Grand Prix.

Reports broke in the Italian media over the weekend that two teams had failed to comply with the new budget regulations last year. The accusations, which are not verified, were aimed at Aston Martin and Red Bull ahead of last weekend’s Singapore Grand Prix.

Mercedes team boss Toto Wolff had demanded that the FIA take robust action over the reports Red Bull broke the rules when Verstappen beat Lewis Hamilton to last year’s world championship.

Red Bull, this season’s leading constructors, deny the accusations with team principal Christian Horner accusing Wolff of “hugely defamatory, fictitious claims” and threatened legal action against Mercedes amid the row.

A Cost Cap Administration was established to ensure all teams are in compliance. Financial records were submitted on March 31 and have been undergoing an audit over the last number of months.

Here we run through all you need to know ahead of the announcements from the FIA tomorrow...

Why is there a cost cap?

Formula 1 introduced the budget cap for the first time in 2021 in an attempt to level the playing field for its 10 teams, in the hope that more competitive teams would make for better racing.

“It is hoped the move will allow the field to close up and prevent the bigger teams from gaining too much of an advantage over those with less resources,” said the Formula 1 website of the cap.

The financial rules were also introduced to ensure the long-standing sustainability of the teams on the grid. Drivers’ salaries are exempt from the regulations.

What are the rules for breaking it?

Sanctions available to the FIA range from a reprimand to financial penalties to a deduction of drivers’ championship points – it means a breach could have an impact on last year’s results.

An overspend of less than five per cent would not carry severe penalties as it would only be deemed as a minor breach. A major breach would be if a team spent more than an extra five per cent. Points deductions as well as a reduction in future spending is said to be the punishments available.

A concrete punishment has not yet been established for breaking the budget cap, minor or major.

What has the FIA said?

Following the reports of teams breaking the cap, the FIA stated last Friday night: “The FIA is currently finalising the assessment of the 2021 financial data submitted by all Formula 1 teams. Alleged breaches of the Financial Regulations, if any, will be dealt with according to the formal process set out in the regulations.

“The FIA notes significant and unsubstantiated speculation and conjecture in relation to this matter, and reiterates that the assessment is ongoing and due process will be followed without consideration to any external discussion.”

On Wednesday, the FIA confirmed they would be delaying their findings: “The FIA informs that the conclusion of the analysis of the 2021 financial submissions of the Formula 1 teams and the subsequent release of Certificates of Compliance to the Financial Regulations will not take place on Wednesday, 5 October.

"The analysis of financial submissions is a long and complex process that is ongoing and will be concluded to enable the release of the Certificates on Monday, 10 October.

"The Financial Regulations were agreed unanimously by all Competitors, who have worked positively and collaboratively with the FIA Cost Cap Administration throughout this first year under the Financial Regulations.

"As previously communicated, there has been significant and unsubstantiated speculation and conjecture in relation to this matter, and the FIA reiterates that until it is finalised, no further information will be provided. The FIA also reiterates that any suggestion that FIA personnel have disclosed sensitive information is equally baseless.”