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@JimL
The way it works is as follows:
Your comapny buys the bike for RRP. They claim the VAT back (-15%)
The resultant cost is paid by you from your gross salary BEFORE tax and NI. Therefore, you save on average 50% off the cost of the RRP.
The saving is slightly lower since the VAT cut and is also dependant on your tax code.
It's still an incredible deal.
I'm not sure what the situation is with proving that you ride the bike to work. I've just submitted a voucher for a full-suss MTB. Anyone who cares to google the bike will see that it's no commuter. No idea whether they check it though.
I think the gist is that you are supposed to ride the bike 70% of the time.
Edit -there's a good calculator on the cyclescheme website, so you can work it out exactly.