Budget cap in F1: What it will and won't affect

In their reveal of the new 2021 Formula 1 regulations, a new cost cap or budget cap of $175 million has been announced for the first time in the sport's history in an effort to bring the grid closer together, but the cap will not affect all area's of the sport; so what part of the sport will have a financial cap and which parts won't?

What will not be affected by the budget cap

Most crucially, drivers' salaries will not be included in the budget cap, nor will the 'top three personnel' at any team (meaning: highest paid). As you can imagine, there is a massive gulf in salaries between a rookie like Lando Norris and an accomplished driver like Lewis Hamilton, so for this not to be included in the cap must be good news for bigger, wealthier teams.

Marketing, property costs, income tax and other non-F1 activities won't be affected either, nor will traveling costs like flights and hotels for either races or tests. 

Finally, purchasing engines from an engine manufacturer won't count in the $175 million cap, although there is a cap to how much an engine can cost a customer - 15 million.

What WILL be affected by the budget cap

In short, everything performance-related will be capped at $175 million.

Development of new parts and testing them will be where the big teams will take the biggest hit in their current expenses. Liberty Media have said they want to limit introductions of upgrades across the season and have made the new rules in such a way which leaves little room for teams to extract more performance