Is it possible to run a TIme Machine backup using a VPN connection when working remotely?
Have tried it but it fails (unable to mount backup disk)
Yes, it is possible. You will likely have to manually mount the sever volume (finder::Go::connect to server). Once mounted, you will have tell time machine to use the new volume (even though it is the same old datastore).
Beware of the amount of data you are backing up and the bandwidth of your VPN. Gigs of data that can easily be backed up when you are home, might take days over a remote VPN connection. But it is possible to do.
Personally, I carry a small portable USB drive for the purpose, but if you have ample bandwidth, it will work.