Answer: Very easily!
- Open Handouts and log in as a teacher.
- Tap on the class from which you want to delete the student.
- Tap on 'Students' (tab towards the top right of the screen).
- Tap on the student you wish to delete.
- Tap on 'Edit student' (top right of the screen).
- Tap on 'Delete this student'.
- Tap on 'Delete' when prompted.
And the student in question will magically disappear from your class!