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Preheat oven to 180°C. Line 2 baking trays with baking paper.
Using an electric mixer, beat butter, sugar and vanilla in a small bowl until pale and creamy. Add egg and mix until well combined. Sift flour and baking powder over butter mixture. Add milk and stir until just combined. Using 2 teaspoons of dough at a time, roll dough into balls. Place on baking trays lined with baking paper. Using the heel of your hand, flatten biscuits slightly (allow room for spreading).
Make an indentation in the centre of each biscuit (see note). Fill each indentation with 1/4 teaspoon jam.
Bake for 12 to 15 minutes, swapping trays over in oven after 10 minutes, or until light golden. Allow biscuits to cool on trays for 5 minutes. Transfer to wire racks to cool completely. Serve.