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Shipping VAT Rate follows Product Rate

Shipping VAT Rate follows Product Rate

Hello,

 

So my first question.  I am setting up a new Magento site and have hit an issue with VAT on Shipping.  In the UK the VAT rate applied to the Shipping should be the same rate as that charged on the product.  So for a product that has 20% VAT rate, the rate on the shipping should be 20% and for a product that has 0% VAT then the shipping should have 0% VAT applied.

 

I have set up two tax rules, one with Taxable products and Shipping and one with non taxable products and shipping.  However regardless of the product rate, VAT is always being charged on shipping, what have I missed?

 

Thanks

 

James