Magento Add Shipping Tax to Tax Breakdown And Grand Total

Question

I'm using Magento and I am having a problem with the totals being displayed.

At the moment I have this:

Subtotal: £10.00
Shipping & Handling: £5.00
Tax (at the moment just using 20% of Subtotal) (20%):£2.00
Grand Total: £17.00

So It should look like:

Subtotal: £10.00
Shipping & Handling: £5.00
Tax (need it to be 20% of subtotal AND 20% of shipping & Handling) (20%):£3.00
Grand Total: £18.00

As you can see the Tax has gone from £2.00 to £3.00 as I need it to take 20% of the Shipping & Handling fee as well as 20% of the subtotal fee?

Answer 1

Go to System -> Configuration -> Sales -> Tax -> Tax Classes and change the Tax Class for Shipping drop down to Shipping and re-check your totals.