I set the spellchecker to US English if the POV character is a Merkin and to UK English if the character is British (or an Elf, or a warrior in T'ang Dynasty China, or anything else where the story is written in English as a substitute for a language not spoken by the readers). If the story is an ensemble piece with no clearly defined POV character then I set the spellchecker to the language of the fandom. US English for 'BtVS', UK English for 'Primeval' (even though they were cowardly enough to spell the name of the show the Merkin way!), UK English for 'Discworld' or 'Thomas the Tank Engine', US English for 'Dr. Horrible'.

I don't change the spelling if the POV character changes during the story, or when the speaker changes, although of course the dialogue has to replicate word usage and speech patterns.