In response to Red Bull's violation of the Formula One cost cap, the FIA imposed a $7 million fine and a wind tunnel penalty.

Red Bull has been fined $7 million and given less time to develop cars after exceeding the Formula One cost cap last season.

Following over two weeks of speculation and criticism from rivals for their'minor' breach of the $145m limit in Max Verstappen's maiden title-winning campaign, Red Bull were punished on Friday at the Mexico City Grand Prix after reaching a 'accepted breach agreement' [ABA] with the FIA.

The ABA required Red Bull to admit their wrongdoing, with the team $2.2 million over the cap, but it also brought an end to an F1 saga and less severe punishments.

The FIA admitted that if a tax credit had been applied correctly, Red Bull would have only been $0.5 million over.

"There is no accusation or evidence that Red Bull sought to act in bad faith, dishonestly, or fraudulently at any time, nor has it wilfully concealed any information from the Cost Cap Administration," according to an FIA statement.

Red Bull has received both a financial and a minor sporting penalty, the most serious of which is a 10% reduction in wind tunnel time over the next 12 months.

Due to winning this year's constructors' championship, which they wrapped up last weekend in the United States to follow up Max Verstappen's second drivers' title, Red Bull were already set to spend less time in their wind tunnel than their rivals.

In F1, the number of wind tunnel runs varies depending on where a team finishes in the championship.

With their penalty, Red Bull will have 25 runs in their wind tunnel instead of 28 next season. By comparison, Ferrari will have 30 runs if they finish second in the championship, and Mercedes will have 32 if they finish third as expected. Last place constructor has 46 runs.

Some, however, may believe Red Bull got off lightly.

How did Red Bull exceed its limit?

On October 10, Red Bull was accused of a minor breach - an overspend of less than 5% [$7.25m] - of F1's new-for-2021 cost cap, and had been in discussions with the FIA since then.

The team has maintained their innocence throughout, despite 'cheating' accusations from McLaren boss Zak Brown and harsh criticism from other rivals, and All Sports understands their initial submission was $4.5m under the limit.

Tax mistakes were responsible for $1.7 million of their $2.2 million overspending.

The FIA has now confirmed that Red Bull did not include the following relevant costs in its budget cap:

Excluded costs for catering services were overstated.

Consideration costs and associated employer social security contributions

Bonus costs and associated employer social security contributions

Understatement of Relevant Costs in relation to a gain on sale of fixed assets due to failure to make

the required upward adjustment

Apprenticeship levies cost money.

Consideration costs and associated employer social security contributions

Understatement of Relevant Costs in Relation to Power Unit Cost
Consideration costs and associated employer social security contributions
Understatement of Relevant Costs Relating to Inventory Use
RBR made a clerical error in calculating certain costs re-charged to it by Red Bull Power Trains.
Certain travel expenses
Maintenance costs
According to financial regulations, the FIA pursued an ABA first, and the agreement barred Red Bull from receiving more severe punishments for a minor breach, such as point deductions or a reduction in future caps.

Verstappen only beat Lewis Hamilton by eight points for the drivers' championship last year, in already contentious circumstances.

If Red Bull had rejected the FIA's terms, the case would have been sent to the cost cap adjudication panel, where the full range of penalties would have been considered. After that, it could have escalated to the International Court of Appeals, prolonging a scandal that no one wanted.

Red Bull maintains that this is a severe sanction.

"This is Red Bull saying, 'We accept we were wrong, we overspent,' and the FIA has handed down the sanction.

"It's less of a punishment than many people have suggested.

"The wind tunnel reduction of 10% was much lower than many people had predicted; it could have been 25%.

"According to some team members, Red Bull still considers this a harsh sanction, despite the fact that they were only slightly over the cap.

"There have been some quite strong words exchanged behind the leading teams in the lead-up to all of this - we had Toto Wolff, Ferrari, and then Zak Brown weighing in on this." Brown equated breaking the cost cap with cheating in a leaked letter.

"However, the FIA statement addresses allegations of cheating, saying, 'There is no accusation or evidence that RBR has ever sought to act in bad faith, dishonestly, or fraudulently, nor has it ever concealed wilfully any information from the cost cap administration.'

"And, as far as the FIA is concerned, that has been fairly consistent throughout."