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Preheat oven to 150 degrees celsius (fan-forced). Grease and line a 20cm round cake tin with baking paper (on the base and sides) and set aside.
Place the butter, brown sugar, milk and white chocolate melts into a microwave-safe bowl and heat on 50% power for approximately 5 minutes or until melted (stirring every 30 seconds). Allow to cool slightly.
Sift over the plain flour, self-raising flour and add the vanilla extract, eggs and salt. Mix together until smooth.
Pour the mixture into the prepared cake tin. Bake for 60 minutes or until a skewer inserted into the middle comes out with just a few crumbs on it. Allow the cake to cool before transferring to a wire rack or plate.
To make the caramel frosting, melt the butter in a microwave-safe bowl on 50% power.
Add the brown sugar and milk and stir together. Place back into the microwave for 2-3 30 second bursts or until slightly thickened. Allow to cool slightly for a few minutes.
Sift the icing sugar mixture over the top of the mixture and mix together with a whisk.
Spread the caramel frosting over the top of the caramel mud cake and serve.