In a medium sauce pan, place the sugar and water. Stir over a low heat until the sugar is dissolved and you get a clear liquid. You shouldn’t let the sugar boil until all the sugar is dissolved in water. It will be cloudy for a while and suddenly go clear.
let the sugar boil for about 8 Minutes, until it starts to colour to a lovely caramel colour. Don’t forget that it will get darker once you add the cream and butter, so don’t make it too dark.
Remove from the heat and add butter. Stir well.
Add the cream and vanilla and stir again well.
If there are little lumps in the caramel, return it to the stove and heat for a second or two to dissolve the lumps.
Pour into a glass bottle and allow to cool before refrigerating.