The message goes thru the gateway, the node receives it and replies with ack, even if it doesn't anything with it.

Is your nose sleeping maybe?

var pingDistance = tankDistanceSensor.value; //Water tank level percent

You have to use parseInt(tankDistanceSensor.value), Sensor variable always have String value.
var pingDistance = parseInt(tankDistanceSensor.value); //Water tank level percent

//THESE 2 LINES DO NOT SEEM TO SET THE VALUES
tankLitresSensor.setValue(litres);
tankPercentageSensor.setValue(percentage);

After these two lines add the following lines,

  mcApi.sensor().sendPayload(tankLitresSensor); 
  mcApi.sensor().sendPayload(tankPercentageSensor); 

1. Create 2 virtual sensors
2. Create a "operation" script - using javascript
3. Create a rule that triggers the script when value changes

I've added my javascript here, but the last 2 lines of code are not setting the virtual sensors values. Can you assist with how to do this please?

// Get Pump sensor via UID-Tag
var tankDistanceSensor = mcApi.uidTag().getByUid("water-tank-distance").getResource();
var tankLitresSensor = mcApi.uidTag().getByUid("water-tank-litres").getResource();
var tankPercentageSensor = mcApi.uidTag().getByUid("water-tank-percentage").getResource();

//get config in variable
tankConfig = mcApi.variable().get("water-tank-config");
fullDistance       = tankConfig.value; // Value 
emptyDistance = tankConfig.value2; // Value 2
totalLitres = tankConfig.value3; // Value 3

//Get sensor values with UID Tags
var pingDistance =  tankDistanceSensor.value; //Water tank level percent

if (pingDistance > 0 && pingDistance < (fullDistance + 50)) {
  percentage =  ((pingDistance - emptyDistance) / (fullDistance - emptyDistance) * 100);
  litres = percentage / 100 * totalLitres;

  //THESE 2 LINES DO NOT SEEM TO SET THE VALUES  
  tankLitresSensor.setValue(litres);
  tankPercentageSensor.setValue(percentage);

}

• Map your script with operation
• Create a rule with real sensor and set threshold as in negative number(ex: > -1). And uncheck ignore duplicate check box. Map your script operation with this rule.
• Your script will be executed, when you receive value from your sensor.