What happens about your ownership fee?
It's £70, I included that in the calculation. What happens to it? It goes to cyclescheme, it's effectively part of the cost of the credit.
And more generally (and you might not know or care about this), if you're only paying £680 in, who's paying the rest? How much does Brompton/the bike shop get?
Yes, I do care. It works like this: I give the bike shop a voucher for the full price £1000. Cyclescheme gives them the money (I don't know if they have to give a kickback/discount to cyclescheme). The full amount is then deducted from payroll - £1000 is given to cyclescheme. It's deducted before tax & NI, so I have to earn £1000 before tax to pay for the bike. If I paid for it after tax I'd have to earn £1730 to have £1000 in my pocket to pay for the bike.
So, HMRC are getting roughly £420 a year less than if I didn't cycle to work. So yes, this is tax avoidance. But it's not a clever rip-off-HMRC scheme exploiting a loophole, it was deliberately set up by the government as a way of encouraging people to buy bikes to cycle to work on.
Some people might say the £420 might be better spent on schools and hospitals, but these are the rules. And as Cudz pointed out earlier, it helps the bike shop, it helps Brompton, and it enables someone else to get a year-old Brompton at a price they can afford. I don't feel guilty. Alternatively I could commute by car.