I have strange behaviour which has always existed in my magento 188.8.131.52 as far as I am aware.
I have a tax rule of 20% for all products so prices are input without tax.
When creating a Percentage discount in Promotions > shopping cart price rules>
Under Actions tab I am choosing 'percentage of product price" option.
I am setting value to 7%.
When I use the coupon the discounted amount seems work out 20% more. E.g 7x1.2 = 8.2%
So for a real example I have a product with price 519. I apply 7% coupon and the final price is 475.40.
519 to 475.40 is in fact a difference of 8.38%
This happens to all products with regular price and special prices.
I also have this issue with fixed price discounts.
If I want to have a discount of £5 I have to make the value in the shopping cart price rule 4.166. Is this normal behaviour for magento?
I could not find anyone posting about this exact issue anywhere. Maybe I am wording it wrong in my searches.
Now onto my tax settings in system>configuration>sales>tax
Please see image below.
Any help would be much appreciated.