What is Aunt Sally going to do now?

I really like this example and think it is very realistic. Bearing in mind the fact that Aunt Sally has another full-time job, I am interested in analysing roughly how the £40,000 costs other than finance costs would be made up.
To start with there would be insurance: £2,000 pa?
20 gas safety certificates at, say, £60 each: £1,200.
Car and travel expenses: ?
Painting and decorating: ?
Office supplies and telephone charges: ?
Replacement furniture: ?
Repairs and replacement fixtures: ?
Employing a lettings agent/manager @ 10% of rents: 10,000?
With 20 houses, a few might get trashed now and then and require extensive work.
All the time and effort Aunt Sally puts in would not, of course, be recognised as such - it's only if someone else does it that it counts as 'work.'
What do people think?
I'm interested in this as I think we have to show how it is a business and not a passive investment.

To add to the list of likely costs, if she has 20 properties, the chances are that each year she is likely to have to replace a full roof or a flat roof, install/replace double-glazing in one or two propertied, one of two boilers will pack in and have to be replaced... £20,000 could easily be swallowed up with those sorts of things.
Also, these days, she is likely to have to do some licensing - pay maybe £500-£800 on those for some or all of the properties at some point and as we know, the fee is only the start of it - there will then be thousands of pounds worth of work ordered - sometimes a complete waste of time and money; I've had to replace small fire extinguishers for large ones that are too heavy to lift and then a year or two later the rules change and the small ones are okay after all. Ditto fire alarms - they demand you put one in and later on, say they're not necessary.
Sorry if I'm getting off the point - but I'm on my own here so far, so I've started to ramble.
As a landlord who does not have a second full-time job and does not employ letting agents and does all the work between myself and my partner, and who is completely dependent on the rental income, it is very annoying to be told you can manage all these houses like a 'pure investment.' Except when others do all the work it counts as 'work.'
Anyway, the issues raised in the above article a lot broader than my comments indicate - they spell no less than catastrophe for many landlords with this iniquitous and confiscatory tax.

How is the £11,000 tax increase calculated?

Whichever combination of 2 and 3 produces the highest present value of future transactions relating to the properties.

This will require approximations of future finance costs and future values (to the decision maker) of money in addition to information at hand. Several rates of financing and inflation would need to be compared in this exercise, to see if estimation error makes much difference to current decisions. Critical would be taking sound advice on the likely range of future rates of finance and inflation - if ever there can be such a thing.

A working knowledge of tax is asssumed.

Reply to the comment left by "Jay James" at "05/08/2015 - 19:22":

Uh, can we have that in English please?

Very VERY good. Someone send this all the MP's & Newspapers etc.

Mick,

The quick, flippant answer, using round figures, is to put the rent up by an additional tenner (15) a month every year over the next 5 years.

By year 5;
£50 per month increase x 12 months x 20 properties = £12000

Tenant tax bill can be paid and Aunt Sally is in the same position as before.

Course, there is the additional tax to be paid on that but the annual tax exempt amount will go up etc. Just using rough round figures.

Hi,
This is a great example, I am starting to see a theme, most people with portfolio's that seem to be hardest hit, work full time as being a landlord. Isn't it time we got this recognised as a business an not an investment.
I don't have to repair the boiler on my ISA, or repair the roof while the sun is shining on my savings account.

Reply to the comment left by "Ros ." at "05/08/2015 - 19:34":

Get some f ing brains and educate yourself. It may not be perfect but it outlines a form of decision making the self employed could usefully learn.

Reply to the comment left by "Jay James" at "15/08/2015 - 11:40":

Ah, I think I've spotted a troll. How charming!
For your information I am highly educated, but not in tax matters. I haven't had to be, and I find it tedious. I must however, repeat, that it would be helpful if you wrote more clearly - this could be a helpful link for your further education: http://www.plainenglish.co.uk/
On the other hand, maybe I'm wrong and you're a super-intelligent person, who we mere mortals can't understand.... somehow, though, I think not.