Preheat oven to 350°F / 177°C / Gas Mark 4
Line a cupcake pan with paper liners and set aside.
Whisk all purpose and cake flours, salt and baking powder in a small bowl and set aside.
Cream butter, cream cheese and sugar together for 5 minutes, until pale and fluffy.
Add egg, then vanilla and mix until combined.
Add half of the flour mixture and mix until just combined, then add milk and mix until just combined. Finish with remaining flour mixture.
Add water and mix until fully incorporated, but do not overmix.
Using a medium cookie scoop (or 1/4 cup measure), portion cupcake batter into papers. Fill about 2/3 full.
Bake for 18 - 22 minutes, until a tester comes out with a few moist crumbs on it.
Remove cupcakes from the pan and place on a wire rack to cool completely before frosting.
While cupcakes are cooling, make frosting: Cream butter and cream cheese together with an electric hand mixer until fluffy, about 4 minutes. Add vanilla or lemon juice and a pinch of salt, mix to combine.
Add powdered sugar in 2 batches, thoroughly mixing between additions and whipping for 30 seconds after second addition to make it light and fluffy.
Transfer into a piping bag fitted with a large star tip and pipe frosting onto cupcakes.
Cover with sprinkles, if desired. (I made my own blend using sprinkles from my collection)