Preheat the oven to 180°C bake. Grease and line a cake tin with baking paper.
Add the flour, sugar, baking powder, baking soda and cinnamon to a large mixing bowl. Stir until evenly combined.
Add the wet ingredients to the dry ingredients and gently mix until just starting to combine.
Add the grated carrot and fold through until evenly distributed. Don't overmix the batter.
Pour the batter into the prepared cake tin and spread evenly.
Bake for 35–40 minutes, or until a skewer inserted into the centre comes out clean.
Allow the cake to cool in the tin before transferring to a cooling rack. Cool completely before icing.
To make the cream cheese icing, beat the softened butter and cream cheese together until smooth.
Add the vanilla essence and icing sugar and beat until smooth and well combined.
Spread the icing over the completely cooled carrot cake.
Sprinkle with chopped walnuts, if using, before slicing and serving.