How do i reverse a incorrect vendor payment

I incorrectly posted a payment to a vendor from the payment journal. I unapplied the payment from the purchase invoice. I cannot reverse the payment using the "reverse transaction button" as "the entry has an associated unrealised vat entry".
If I post a refund from the payment journal all balances on chart of accounts return correctly, however vendor payment (LCY) is incorrect (still shows phantom payment) and phantom payment and refund appear on bank reconciliation....
What am I doing incorrectly?