Earlier this week there was somewhat of a storm when Pitpass' business editor Christian Sylt revealed that F1's UK corporation tax payments in 2011 came to just £945,663 on pre-tax profits of £305.6m.

As Pitpass pointed out yesterday, this actually says more about the UK's tax system than F1 itself. The reason for this is that the method F1 uses to minimise its tax bill is not only completely legal and legitimate but it is also approved by the UK authority H.M. Revenue & Customs. The method was put in place by F1's controlling shareholder CVC following its takeover of the sport in 2006 and it has contributed to its fortunes accelerating since then. However, it isn't the only cost-cutting trick under F1's bonnet as an article by Sylt in today's Telegraph reveals.

Much has been made of CVC benefiting from F1's profits. Last year alone CVC netted £1.4bn ($2.1bn) through selling 28.4% of F1 to money managers BlackRock, Waddell & Reed and Norges, the investment division of Norway's central bank. In addition, it has received hundreds of millions of Pounds in dividends paid out from F1's profits. However, CVC has been far from the only beneficiary. Even if you include the revenue from the share sales, the total amount that CVC has received from F1 still comes to around the same as the team prize money payments since the private equity firm took over. The amount received by the teams rose by £292.9m ($450.5m) to £454m ($698.5m) in just the four years to 2011. It is all thanks to F1's profit-making formula.

According to Sylt's article CVC has taken advantage of low interest rates to refinance F1's £1.6bn ($2.5bn) debt and reduce the sport's borrowing costs. In a nutshell, refinancing a loan simply involves paying it back and then taking out a new one. It allows companies to keep the same amount of debt but take advantage of better rates on offer.

F1's debt was not close to being due for repayment but CVC refinanced it as rates have been falling. A source close to CVC says that "because the market was hot there was an opportunity to change the price of the debt from around 6% all-in to around 4% all-in... but there is no more and no less. It is still $2.5bn of net debt."

Recently-filed documents show that the loan was refinanced on 25 June and the transaction was handled by the Royal Bank of Scotland (RBS) and Goldman Sachs. The source says that the new loan is due for repayment in five years time and it is expected to have a visible impact on F1's bottom line.

The latest accounts for F1's Jersey-based parent company Delta Topco show that in the year-ending 31 December 2011 it made a £232.9m ($358.3m) net profit on revenue of £975m ($1.5bn) after deducting £76.9m ($118.3m) of debt-related charges. The source says "we have got $2.5bn of debt so taking 2% off the interest rate takes nearly $50m a year off our costs."

However, the reduction in the interest rate has put off some investors. "We had to replace about $1bn of the debt," says the source. "Some of the old syndicate said we wanted to lend at 6% but not at 4% because it doesn't meet our return criteria. They walked away and we needed to find new lenders to step in to their shoes and provide $1bn."

CVC bought F1 in 2006 from the family trust of the sport's boss Bernie Ecclestone and three banks – JP Morgan, Lehman Brothers and German lender BayernLB. The acquisition was financed with two loans - one of £715m ($1.1bn) from RBS and another of around £627.7m ($965.6m) from CVC's investment Fund IV. It now owns 35.5% and is hoping to exit through an Initial Public Offering (IPO) of F1's shares floated on the Singapore Stock Exchange.

The source says that "the work to create a debt facility for the public company is done now because this automatically converts into that if we IPO any time in the next two years." The float was due to take place in June last year but was delayed due to the economic crisis in Europe. Although it is unclear when it will get the green light, the foundations are clearly in place.