The Government has confirmed UK's first workplace parking levy will come into effect in Nottingham in 2012, meaning employees will have to pay up to 350 per year to ensure a space.

Under the scheme any company with 11 or more parking spaces will be charged £250 per year for each - rising to a potential £350 within two years. Employers can choose to pay this themselves or pass it onto their staff.

It is expected the levy, which will raise funds to upgrade the city's tram network, will be adopted in other councils affecting workers on a wider scale. But in Nottingham alone 40,000 commuters could be affected.

Commenting on the announcement, Ken Sheridan, director of Remote Employment, said: "With 3.5 million Brits across the UK now working from home and many more millions working remotely, this is a good time for companies in Nottingham to adopt a flexible working policy in order to get around this direct cost increase to their business.

"The 10 million people in Britain who drive to work every day will all eventually have to consider that they too might be sucked into this scheme."

He added: "With so many jobs under threat, introducing a workplace parking levy will hinder businesses growth.

"We would like to see the Government and local councils take an imaginative approach to offering financial incentives for home-working. This would provide another means of reducing congestion and a company's carbon footprint."