Navigate to the Banking tab and then click on Transactions. Select the appropriate bank account in the dropdown list.
The Delete link will appear in the Actions field of a bank transaction if the transaction (or line items inside the transaction) have not already been reconciled or included in a VAT Report.
Click the link and confirm the prompt to delete the bank transaction.
Although inadvisable, it is possible to unreconcile bank items and delete VAT Reports in order to delete transactions. Careful consideration should be given to any representations already made to external parties such as your local Tax Authority.