I've now updated the design a bit:
Added:
1. Missing gnd.
2. SPDT switch to help with load sharing, able to charge the LiPO and supply the circuit separately using 5V usb. The other side of switch allow battery to source when USB disconnected.
N.B. i guess a mosfet could be used instead for automatic switching using the 5v USB to switch, not sure about volt drop though.
3. Added Stat line out from MCP73831 to GPIO of MCU, at the moment the LED lights when charging, i wanted the signal also to route to GPIO to detect this, will this work?
Thanks for everyones help, and ye the battery just protects from under voltage, the MCP73831 controls charging.