Answer
Typically there are several rates: standard rate (the main rate, e.g., 20% in the UK), reduced rate (e.g., 5% on some supplies like domestic fuel), zero rate (0%, e.g., most food and children's clothing—still taxable but at 0%), and exempt (no VAT, e.g., insurance, some financial services). Zero-rated differs from exempt for input VAT recovery.
Standard 20% | Reduced 5% | Zero 0% | Exempt (outside VAT).Real-world example Food is often zero-rated while insurance is exempt, which affects whether related input VAT is recoverable.