I don't know about VT, but since the lack/reversal of payment means that a) money didn't come out of the account that VT assumed had, and b) the service provider won't have been paid as VT says they have, the answer is to enter a transaction that is the exact reverse of the one which VT has. I presume this is set up as a recurring transaction which VT just does every month.
Probably
Dr £80 Bank (to reverse the Cr that would have taken the money out according to the recurring transaction) Cr £80 Supplier (to increase the liability to them again because they haven't been paid)
but to be sure you should look up the recurring transaction to get the right account to use.
With VT you can either delete the transaction (unless it has been included in a VAT return), which will remove the transaction and associated postings, or you can make a reversing copy, which will contra the transaction.
Right click on the transaction and you will see both options in the drop down list. I generally add a bit of text to the reason for reversing the transaction (miss posting error etc)
