Preheat the oven to 180°C and line a muffin tin with cupcake cases.
In a bowl, cream together softened butter and sugar until light and fluffy. Add an egg and vanilla extract, then gradually incorporate the flour and baking powder. Finally, mix in the milk.
Spoon the batter into the prepared muffin tin, filling each cup about halfway. Bake for 12-15 minutes or until a toothpick inserted into the center comes out clean. Allow the cupcakes to cool completely.
For the icing, beat the softened butter until creamy and fluffy. Slowly add powdered sugar, and if needed, incorporate a splash of milk to achieve the desired consistency. Divide the icing into three bowls and add a drop of food coloring to each bowl. Transfer each colored icing into a piping bag with a star nozzle.
Once the cupcakes are cooled, pipe the colored icing onto each cupcake in a swirl pattern. Finish by sprinkling with your favorite sprinkles.