Step 1. Preheat the Oven: Set the oven to 350°F (175°C). Grease and flour two 9-inch round cake pans.
Step 2. Prepare the Cake Batter: In a large bowl, cream the softened butter and sugar until light and fluffy. Add eggs one at a time, beating after each addition. In a separate bowl, mix the flour, baking powder, and salt. Gradually add the dry mixture to the wet mixture, alternating with the milk, starting and ending with flour. Stir in the vanilla extract.
Step 3. Bake the Cake: Pour the batter evenly into the prepared pans. Bake for 25-30 minutes or until a toothpick inserted into the center comes out clean. Let the cakes cool in the pans for 10 minutes, then transfer them to a wire rack to cool completely.
Step 4. Make the Caramel Icing: In a saucepan, melt the sugar over medium heat, stirring constantly until it turns a deep amber color. Add the butter and stir until melted. Gradually add the cream while stirring. Let it simmer for 1-2 minutes, then remove from heat. Stir in the vanilla and let the icing cool until it thickens slightly.
Step 5. Assemble the Cake: Once the cakes have cooled, place one cake layer on a plate and spread a layer of caramel icing on top. Place the second cake layer on top and frost the entire cake with the remaining caramel icing.
Step 6. Let the Icing Set: Allow the cake to sit for at least 30 minutes to let the caramel icing set before serving. Enjoy your delicious homemade caramel cake!