Uncertain where zones are defined.....

So I have a section called Zones in Admin => Locations which has been populated with UK counties from the UK template contribution. When I try to set up shipping (Admin=>Shipping, the defaul shipping module) I am disabling everything except Flat as I want a flat rate for shipping. When I get to the drop down so that I can specify that I only want to ship in UK I find that I have only 3 options Florida, UKVAT and none.

If I select UKVAT then this does not relate to the zones that are picked up in the Locations area from the UK template install and the user is told that I don't ship to him. If I set it to none, I get to ship worldwide ... which I'm not ready to do.

Do I have to define every zone that's in Locations again in Taxes/Payments/Shipping?

Thanks for help

... so in the way of things I think I now understand that I can set up a zone that incorporates other zones and my UKVAT contains all the bits of the UK.

In the shipping modules section, I now have an orange button by the flat rate module so I guess I still need to do something else .... but what is it?