Preheat oven to 180C/350F. Butter 2 x 21cm / 8" round cake pans (sides and base) and dust with cocoa powder.
Sift the Dry Ingredients and whisk to combine in a bowl.
Place butter and sugar in a bowl and beat with electric beater or in stand mixer until smooth and well combined (use paddle attachment if using stand mixer).
Add eggs, one at a time, beating in between to combine. At first it will look curdle - keep beating until it's smooth.
Add vegetable oil, vinegar, vanilla, buttermilk and red food colouring. Beat until combined and smooth
Add Dry Ingredients. Beat until just combined - some small lumps is ok, that's better than over mixing.
Divide batter between cake pans. Bake for 25 - 30 minutes on the same shelf, or until a toothpick inserted into the centre comes out clean.
Rest for 10 minutes in the pan then turn out onto a cooling rack and allow to cool.
Beat together cream cheese, butter and vanilla for 3 minutes (this makes it really smooth and changes from yellow to almost white). Add icing sugar and beat for 2 minutes or until frosting is light and fluffy to your taste.
Cut the top off the cake using a serrated knife (to make the layers neat).
Spread one cake with 1 1/2 cups of frosting. Top with the other cake. Spread top and sides with remaining frosting.
Optional: Crumble offcuts and use to decorate the top rim and base of the cake.
Cake flour is lighter and has a lower protein content that all purpose / plain flour. It produces cakes with a very soft crumble and minimal "bounciness", like what you get from posh bakeries.
It is not readily available in all countries, though it can be found in Australia in supermarkets (Coles, Woolworths).
SUBSTITUTION - If you can't find cake flour, substitute as follows: Measure out 2 2/3 cups / 400 g plain (all purpose) flour into a bowl. Remove 5 tbsp / 60g plain flour, then add 5 tbsp / 60g of cornstarch / cornflour.
CAN'T USE CAKE FLOUR? This recipe will work just fine if you make this with just all purpose / plain flour. The cake just won't be quite as tender.
Baking Soda is also called bi-carb soda. It works like baking powder but it is 3 times stronger. It needs acid to activate it (buttermilk in this recipe). It cannot be substituted with baking powder in this recipe.
Normal white sugar will also work just fine, it is just that caster sugar blends in easier, faster and better.
Buttermilk - for most baking recipes, buttermilk can be substituted with milk + lemon juice left to curdle. But for this recipe, it does not work as well so please use buttermilk!
Don't worry if it separates slightly because of the oil, it will come together when the flour is added.
This can be made in one cake pan (but 2 cake pans is better/easier). Just pour batter into one cake pan and bake for around 45 minutes in total, but you must cover with FOIL at around 30 minutes, otherwise the top may get too brown. Then cut cake in half.
If you are in the UK, please use GEL not liquid food colouring. The liquid colouring sold there tends to be natural rather than artificial so it is not as intense as the liquid colouring we have here in Australia and the US. So to achieve the intense bright red colour, you will need to use gel.
OIL SPLITTING: A few readers had a problem where the base of the cake was oily once removed from the pan. The steps in the recipe to ensure this does not happen are: ensuring the batter is beaten until smooth after adding eggs, then again after adding oil (batter initially looks split, but keep beating and it comes together), and ensuring the butter is extremely soft, bordering on melted. If the butter is too soft, then what happens is that it melts while making the batter, rather than creaming, and this "leaks" while baking. This can happen with any cake that is made with creamed butter.