Confidence amongst small businesses remains low at the start of 2013, but is higher than it was going into the two previous years, according to research.

The annual survey by the Federation of Small Businesses (FSB) found many of its 200,000 members were concerned about lack of demand and wider economic issues.

It said 2012 had been tough but firms were cautiously optimistic moving into the new year.

The FSB's Chairman, John Walker, said that while 2013 wouldn't have the glamour of the Olympics and the Jubilee, he hoped it would be the year in which the UK turned the corner into recovery.

"The signs seem to be positive, but it's going to be a long road ahead with some economists warning of a triple-dip recession, and others cautious optimism," he said.

"There is little doubt small firms are best placed to help the recovery as long as they have the confidence and ability to invest and grow."

The FSB highlighted a lack of preparation amongst small firms for a move to make them report their payroll in real time.

The changes are being brought in to try to make PAYE deductions more accurate.

Walker said this would place a "huge compliance burden" on firms, with many not even being aware of the changes that are coming in in four months time.

The issue of access to lending is also still firmly on the agenda.

The survey showed less than one in 10 firms found credit to be easily available in the fourth quarter.

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