Hi Remi,
You are correct – custom shipping cost should be set without VAT. If you check the description tip near the “Cost” option, it says “Enter a cost (excl. tax) or sum…”. We did that because same cost settings rules are used in standard WooCommerce “Flat rate” shipping settings (i.e. also excl. tax).
I could probably add an option to set cost with VAT, however I’m not really sure I understand the task correctly. I mean – you could just precalculate shipping cost manually just once and enter it without VAT (e.g. if shipping cost is $100 with VAT and VAT is 20%, then you would enter 100 / 1.20 = $83.33 as custom shipping method cost) – wouldn’t that solve the issue? What am I missing?
Also, as you’ve probably noticed, there is “Tax status” option in custom shipping method’s settings, so you can set if final shipping price for the customer should include or exclude VAT.