Magento - Discount price including tax/vat

Question

A client requested that discounts displayed in the shopping cart should be shown including tax/vat. The relevant tax settings at the time were:

• Apply Customer Tax: After Discount
• Apply Discount on Prices: Excluding Tax

We subsequently changed these to...

• Apply Customer Tax: Before Discount
• Apply Discount on Prices: Including Tax

....but whilst the discount is now shown including tax/vat, the tax/vat amount is now displayed without taking the discount into account.

The settings that I thought would give us what we want are:

• Apply Customer Tax: After Discount
• Apply Discount on Prices: Including Tax

....but whilst this shows the discount including tax/vat, the grand total and vat figures are now incorrect and I receive following warning message (despite the settings not being ones which should generate the warning according to http://www.magentocommerce.com/knowledge-base/entry/magento-ce-18-ee-113-tax-calc):

Warning tax discount configuration might result in different discounts than a customer might expect

I've now established that the tax/vat figure is incorrect with these settings because when calculating product tax/vat it is first subtracting the GROSS discount, rather than net. In other words it looks as though changing the 'Apply Discount on Prices' setting not only affects the display of discount, but also the internal calculations.

How is it possible to get discounted prices to show including tax/vat AND for tax/vat to be shown correctly based on discounted values?

[On an Enterprise 1.13.0.2 installation. Tax Calculation Method Based On -> Unit Price, Catalog Prices -> excluding tax]

Answer 1

I have run into a similar situation in the past. The way I have resolved this was by overriding the totals block on cart and checkout and calculating + displaying my own values.