Preheat your oven to 200°C (400°F) and line a baking tray with parchment paper. A properly preheated oven helps scones rise beautifully.
In a large mixing bowl, combine self-raising flour, baking powder, and mustard powder. Mix gently so the dry ingredients are evenly distributed.
Add cold cubed butter to the flour mixture. Rub it in with your fingertips or pulse in a food processor until the mixture looks like fine breadcrumbs.
Stir in most of the grated cheddar cheese, saving a small amount for sprinkling on top later.
In a jug, beat 1 egg and add milk until the total liquid equals 160 ml. Reserve 1 tablespoon of this mixture for brushing the tops before baking.
Gradually add the remaining egg-milk mixture into the flour mixture. Stir gently until a soft, slightly sticky dough forms. Do not overmix.
Lightly flour your surface and roll the dough to about 2 cm (¾ inch) thick. Use a round cutter to cut out scones, dipping it in flour each time. Reform and cut the remaining dough.
Place scones on the prepared tray. Brush the tops with the reserved egg-milk mixture, sprinkle with paprika and the remaining cheese.
Bake for 10–15 minutes, until puffed and golden brown. Check at 10 minutes; ovens vary.
Remove from oven and let scones cool for 5 minutes on a wire rack. Serve warm with butter or cream cheese for the best flavor.