Question:

I am not VAT registered. How do I set up my accounts in Chart of Accounts?

Answer:

When setting up the accounts in Chart of Accounts, you would NOT tick the box - Is Vat usually paid on this account? In fact I would like you to highlight each line where Vat has been added as a yes and update that expense by removing the tick in the Vat Box. This is very important as the system allocates according to how you have captured the item in Chart of Accounts when you set up an "Auto-allocate". (So if Vat has been ticked, VAT Input will automatically be added.)
When allocating line by line in the Cashbook it is not so important as you would Click the "Include Vat" Button if VAT was to be added.

Under FILE - SET DEFAULTS, the very first screen allows you to remove VAT and the VAT percentage.