My experience with booking a hotel in Canada via the US Expedia site is that all taxes were included on the second screen, which is why the claim that Expedia rates don't include VAT for the UK surprised me.
After further correspondence with the UK hotel, I am forced to conclude they are somewhat sleazy and their rate promise is rubbish. After I challenged their statement that Expedia rates don't include VAT they came back with the $40/night difference on a $132/night (Expedia) is due to differences in the exchange rate.