Its very simple, two letters, one gross salary deduction per month. End of.
You might want to review what you're doing.
During the first year, it's a rental agreement, and it's governed by the Consumer Credit Act. There's certain paperwork that has to go with it. It's not difficult - online retailers like Wiggle have sample contracts that you can use.
Technically you can't promise in advance to sell the bike.
When you do sell the bike to the employee, you have to charge fair market value. HMRC would not consider 5% after 12 months fair market value.
Unlikely that you'd get pulled up on the first two, but an HMRC inspector might well pick up on the last one.
Also, if you're going to charge 5% at the end, it would make sense to only recover 95% of the value of the bike over the hire period. In fact, thanks to employers NI, you can make the payments even lower, and still have the company come out even.