VAT adding up incorrectly on orders

[AbiSerradinho]

Hi, 

I have a Magento store, in the past VAT has not shown on any orders, I followed the instructions on Magento's site to set up my VAT rates as I am in the UK (http://merch.docs.magento.com/ce/user_guide/tax/vat.html?Highlight=vat). Our products already have VAT included so instead of including the VAT in the price of the products it adds the VAT on top which is incorrect.

ie: Product is £5.00 - VAT is £1.00 - total £6.00.

It should read: Products is £5.00 - VAT is £1.00 - Total should still be £5.00

Do I need to change the prices of all the products in my store to exclude VAT or have a set the tax rules up incorrectly.

Any help would be much appreciated.

Thanks!

[Pronto]

You need to define whether catalog prices include tax or not. Go to System > Configuration > Sales | Tax > Calculation Settings and check out field named Catalog Prices.

[ptomter]

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