Preheat the oven to 180°C / 160°C / 350°F / Gas Mark 4. Line 2 x 20cm (8-inch) round cake tins with baking/parchment paper and set aside.
Sift the dry ingredients into a large mixing bowl, whisk together until combined.
In another large mixing bowl, cream the butter and sugar until just combined - this should only take a minute or so. Now add the eggs one at a time, mixing well after each addition.
Add the oil, vanilla, vinegar and the food colouring and mix again until fully incorporated.
Add the sifted dry ingredients to the wet ingredients and whisk again until combined and no lumps of flour remain. Be careful not to over mix.
Divide the cake batter between the two lined cake tins. Bake for 30-40 minutes - my cakes took nearer to 40 minutes. Test the cakes are ready by inserting a cake tester/toothpick directly in the centre. If no uncooked batter is attached, then they're ready. Leave the cakes to cool in the tins for 15 minutes, then carefully remove from the tins and transfer to a wire rack to finish cooling completely.
Once the cakes are cool, you can prepare the cream cheese frosting. Cream the softened butter in a stand mixer on medium speed for about 2 minutes to soften. Now add the sifted icing sugar and vanilla and starting on a low speed mix to combine. Continue to beat for 5 minutes or until really pale in colour - stop the mixer halfway through to scrape down the sides and bottom of the bowl.
Once creamed add the softened cream cheese. Turn the mixer up and whisk on high speed for approximately 2-3 minutes or until the frosting is creamy, thick and smooth. You need to use an electric hand mixer or stand mixer with the a whisk attachment to make sure the frosting reaches the correct consistency.
When ready to assemble, take a little bit of the cream cheese frosting and spread that on the base of your serving plate or cake stand. Take one cake layer and place on your serving plate/cake stand. Spread or pipe roughly half the frosting on this first layer. Place the second cake layer directly on top. Decorate the top as you did the other cake layer. Sprinkle over any additional red velvet cake crumbs or sprinkles of your choice.
Serve slices of the cake. The cake will keep stored in the fridge for up to 3 days.