Smart refusal to take in a teetotaller (5)
I believe the answer is:
'smart' is the definition.
(I've seen this before)
'refusal to take in a teetotaller' is the wordplay.
'refusal' becomes 'nay' (archaic word for 'no').
'to take in' is an insertion indicator.
'a teetotaller' becomes 'tt' (abbreviation).
'nay' placed around 'tt' is 'NATTY'.
(Other definitions for natty that I've seen before include "Smart, fashionable (colloq.)" , "Smartly dressed" , "Stylishly dressed" , "Smart, spruce" , "Flashily smart" .)