Hello,
Yes, in the shipping extension settings, I had selected the Tax Class.
The issue was caused by the taxes calculation order being set to the same number as the shipping calculation order in the order totals extension. This resulted in the shipping cost not being included in the taxes.
When I changed the taxes calculation order to a higher number than the shipping calculation order, it then started working and the sub-total plus shipping were both included in the taxes.
It is working perfectly now.