Preheat the oven to 180°C/350°F. Line a muffin/cupcake tin with 5 paper cupcake cases and set aside.
Melt the butter and Caramilk together in a small microwave jug. Allow to cool slightly and then add the sugar, egg and vanilla, and whisk together really well. It may look like the mixture is separating, but give it a really good whisk and it will come together.
Sift in the flour and baking powder and add the salt. Pour in the milk and combine gently until all ingredients are incorporated.
Evenly distribute the mixture between the 5 prepared cupcake cases and bake for 15 minutes until the cupcakes are starting to go golden brown and a toothpick inserted into the centre comes out clean.
Remove from the oven and sit for a couple of minutes before transferring to a cooling rack. Allow to cool completely before frosting.
Frosting
Melt the Caramilk in a small microwave proof bowl or jug in 10 second bursts, stirring after each one, for around 40 seconds or until completely melted and smooth. Set aside.
Combine all ingredients (except the Caramilk) using a spoon or a small hand beater. Add the melted Caramilk and give it a really good stir. I like using a hand mixer to make the frosting nice and fluffy but it's not essential.
Either use a piping bag and pipe the frosting onto the cooled cupcakes or use a knife and spread it on. Top with extra chopped up Caramilk pieces.
Frosted cupcakes will keep well in an airtight container at room temperature for a few days...if they last that long!