Preheat oven to 180 degrees C. Line a 12-hole (1/3-cup/80ml) muffin pan with paper cases.
Place the butter, vanilla, caster sugar, eggs, flour and milk in a medium mixing bowl. Using an electric mixer, beat on low speed until ingredients are combined. Increase the speed to medium and beat for 3 minutes or until batter is smooth and pale in colour.
Spoon cake batter into paper cases. Bake for 20 to 25 minutes or until a skewer inserted into cakes comes out clean. Cool on a wire rack.
Make the buttercream
Using an electric mixer, beat the butter in a small bowl for 5 minutes or until pale in colour. Gradually beat in the icing sugar and then the milk until smooth. Divide buttercream into two bowls. Tint each bowl with a different food colour.
Spread the icing on the cakes. Decorate with the confetti sprinkles.
Store cupcakes in an airtight container for up to 4 days.