You should get this sorted out because you're losing sales. I liked the look of Linelabox but I ended up going to another company who do not require a VAT id for me to buy a template.
The same thing happened with a German-based printer we used (onlineprinters.com). They insisted that customers had to have VAT id so we went elsewhere. A year or so later they managed to fix their system so that non-VAT registered companies could shop there again but by then we had moved on.
FYI: In the UK your business can turnover something like £80,000 per year before having to register for VAT. You are effectively ruling out business from UK small companies.
It's up to you.