Preheat your oven to 180°c (160°c for fan-assisted ovens, Gas Mark 4 or 350°F). Grease and line a 11x7 inch tray with some greaseproof paper. Set aside. In a large bowl, cream together the butter/margarine and sugar until light and fluffy. Mix the eggs one at a time, mixing through before adding the next. Add the milk and vanilla extract. Mix through to combine.
Add the coconut and mix through until combined.
Sift in the self-raising flour and fold together to create a batter.
Add the majority of the Smarties/M&Ms, holding back some (to top the Polka Dot Slice with before baking). Mix through until evenly distributed in the batter mixture.
Spoon the mixture into your pre-lined tray, spreading evenly to the edges. Top the cake with the remaining Smarties/M&Ms. Bake in your pre-heated oven for 20-30 minutes, until golden in colour, and a skewer inserted to the middle comes out clean.
Allow your Polka Dot Slice to cool for a few minutes before sprinkling a little extra sugar over the top of it, whilst still warm. Once completely cool, remove from the tray and cut into individual portions.