How to fix ? Cart Tax amount display wrong after setPrice in qoute.

[Ashish_k_php]

Tax = $999.89
After $shippingrate = $10 added in qoute display Tax = $1,000.89. 

Below is my code: 

$rate = Mage::getModel('shipping/rate_result_method');
$rate->setCarrier($this->_code);
$rate->setCarrierTitle($this->getConfigData('title'));
$rate->setMethod('standand');
$rate->setMethodTitle('Standard');
$rate->setPrice($shippingrate);
$rate->setCost(0);

Please help me.
Thanks

[Tom Robertshaw · Accepted solution]

What's your tax rate set to? If it's 10% then this would seem to be the right amount of tax, $1 on $10 shipping?