Answers
When is revenue recognised?, When it is earned, as goods transfer or services are delivered, not when it is invoiced or paid.
What is deferred income?, Money received for work not yet performed. It is a liability on the balance sheet, released to revenue as you deliver.
Do we pay corporation tax on prepaid cash?, No, provided the accounts defer it correctly. Corporation tax follows accounting profit, so revenue is taxed in the period it is earned.
Are we agent or principal?, Principal if you control the good or service and carry the risk; agent if you arrange the supply for a fee. It decides whether turnover is gross transaction value or your commission.
How do we treat setup fees?, Usually spread across the expected customer life unless the setup is a genuinely distinct service the customer could buy separately.
Will investors check this?, In diligence, always. A written policy with supporting deferred income schedules is one of the cheapest ways to keep a round on schedule.