Microsoft 365 UK Prices 2026: Business Basic Now £5.40

Microsoft raised most Microsoft 365 commercial prices on 1 July 2026. In the UK, Business Basic went from £4.60 to £5.40 per user per month and Business Standard from £9.60 to £10.80, while Business Premium stayed at £16.90. Those are the list prices on Microsoft’s UK site for an annual subscription paid yearly, excluding VAT.

The new price reaches your bill at your first renewal on or after 1 July 2026 — not automatically on that date. That timing detail is the one most commonly got wrong. Microsoft’s pricing update FAQ says customers who renewed before 1 July keep the previous pricing until their next renewal after it, which is why some businesses are still paying the old rate and others are only now seeing the change land.

What UK businesses pay for Microsoft 365 now

Plan	Before 1 July 2026 (£/user/mo)	Now (£/user/mo)	Change	Added in the July update
Business Basic	£4.60	£5.40	+17%	Copilot Chat enhancements, URL time-of-click protection, 50 GB more mailbox storage
Business Standard	£9.60	£10.80	+12.5%	Copilot Chat enhancements, URL time-of-click protection, 50 GB more mailbox storage
Business Premium	£16.90	£16.90	No change	Copilot Chat enhancements, 50 GB more mailbox storage
Microsoft 365 E3	£31.00	£33.50	+8%	Defender for Office 365 Plan 1, Intune Plan 2 and more, Copilot Chat enhancements
Microsoft 365 E5	£49.00	£51.60	+5%	Security Copilot, further Intune capabilities, Copilot Chat enhancements

All figures are Microsoft’s UK list prices for plans with Teams, on an annual commitment paid yearly and excluding VAT. The “before” column is taken from Microsoft’s UK pages as they stood earlier in 2026. If you buy through a Cloud Solution Provider (CSP) partner your exact price may differ, but it will move by a similar amount.

A few points worth knowing:

• Monthly subscriptions cost 20% more. Microsoft’s UK site lists Business Basic at £6.48, Business Standard at £12.96 and Business Premium at £20.28 on a monthly subscription.
• “Copilot Chat enhancements” means Copilot Chat, not the full Copilot. Microsoft describes them as inbox and calendar awareness plus access to Word, Excel and PowerPoint agents, alongside new Copilot Chat analytics for admins. The full product is still a separate purchase (see below).
• Frontline plans moved furthest. In Microsoft’s US-dollar list, F1 rose by 33% and F3 by 25%. Business Premium and Office 365 E1 were the only suites held flat.

The official plan-by-plan detail is on Microsoft’s UK Business plan comparison, and the full list of what changed is in Microsoft’s pricing and packaging announcement.

What full Copilot costs on top

Copilot Chat comes with every plan above. The full Microsoft 365 Copilot — the version that works across your SharePoint, OneDrive, Teams and email — is priced separately. On Microsoft’s UK site today:

• Microsoft 365 Copilot Business, for organisations with up to 300 users on a Business plan: £16.10 per user per month, currently offered at £13.80 for the first year when bought directly from Microsoft on an annual subscription taken out between 1 July and 31 December 2026; partner (CSP) pricing may differ.
• Business Standard with Copilot: £18.10 per user per month. Business Premium with Copilot: £24.60.
• Microsoft 365 Copilot for enterprise plans such as E3 and E5: £23.10 per user per month.

The with-Copilot plans are listed well below the plan plus the add-on at full price, and Microsoft’s offer terms note that promotional pricing on its Copilot plans applies to the first year only. Check the renewal price before you commit.

Business Premium held at £16.90. If you are on Standard and were already considering Premium for its security and device-management features, the gap between the two has narrowed from £7.30 to £6.10 per user per month.

What the increase actually costs you

Take a 50-person London business on Microsoft 365 Business Standard. The rise is £1.20 per user each month, which works out at £720 a year across 50 users. The same firm on Business Basic pays £0.80 more per user, or £480 a year. Manageable, but worth a look before the renewal rather than after it.

The better question is whether your team will use what the increase pays for. Part of it funds Copilot Chat improvements and extra security features. If nobody uses them, you are paying more for the tools you already had.

Cutting Microsoft 365 spend before renewal

The licences you are already paying for

This is the single highest-impact action you can take ahead of your renewal date. In most Microsoft 365 tenants we look at, we find some of the following:

• Unused licences assigned to former employees, shared mailboxes that do not need a paid plan, or meeting room accounts on full Business Standard licences.
• Over-licensed users on E5 plans who only need E3 capabilities, or on Business Premium when Standard covers their requirements.
• Orphaned add-ons such as standalone Power BI, Visio or Project licences that duplicate capabilities already in a higher-tier plan.

At the new prices, every unused Business Standard licence you remove saves £129.60 a year, and every unused Business Premium licence £202.80. A handful of those offsets the whole increase for a small firm. Our Microsoft 365 support team runs these audits as routine.

Right-size each plan by role

Not everyone needs the same plan. Segment your people:

• Frontline and light users (reception, warehouse, part-time staff): Business Basic or a frontline plan
• Standard knowledge workers: Business Standard
• People handling sensitive data on company devices: Business Premium, for its device management and threat protection
• Compliance-heavy roles (legal, finance, regulated functions): E3 or E5 for advanced compliance and eDiscovery

Add full Copilot to the people who will actually use it, rather than to everyone. Matching the plan to the role almost always costs less than putting everyone on the same licence.

Annual billing costs less than monthly

Microsoft’s UK monthly-subscription prices are 20% above the annual ones: Business Standard is £12.96 a month on a monthly subscription against £10.80 on an annual one. Moving to annual saves about a sixth. Since April 2025, an annual commitment paid in monthly instalments has also cost 5% more than paying for the year upfront. You give up some freedom to scale down mid-term, so for a stable headcount it is usually a trade worth making.

Negotiate with your CSP partner

Most UK businesses buy Microsoft 365 through a Cloud Solution Provider partner, and your partner has some room on margin. With the increase now landing at renewals, this is a fair moment to revisit your commercial terms — especially if you are consolidating several services with the same provider.

Getting value from the Copilot features you now pay for

Part of the increase pays for better Copilot Chat, so it is worth making sure people know it is there. Whether anyone needs the full product is a separate, deliberate decision.

If you do want full Copilot, we recommend a phased Microsoft Copilot deployment:

1. Start with a pilot group of 5-10 users in roles where Copilot’s strengths show fastest — executive assistants, analysts, marketing, and anyone who lives in Outlook, Word or Excel.
2. Set measurable goals, such as less time drafting documents, faster email triage or better meeting follow-up.
3. Train before you deploy. Copilot is capable but unintuitive if nobody has shown people what to ask it. A short, practical session built around real tasks makes the difference.
4. Fix data governance first. Full Copilot surfaces information based on each user’s permissions. If your SharePoint permissions are messy, it will show sensitive files to people who should never see them. Our Copilot governance guide covers what to sort before you roll out.

Weigh Google Workspace before you jump

Google Workspace is the main alternative, with its own Gemini AI features. If you are already embedded in Microsoft — Teams, SharePoint, Entra ID, Intune — the switching cost rarely pays for itself on licensing alone. If you are choosing a platform for the first time, it is genuinely worth comparing.

Your renewal in five steps

If your renewal is still ahead of you — an annual subscription that last renewed in March 2026, for example, keeps the old price until March 2027 — do these five things before it arrives:

1. Run a full licence audit (or ask your IT provider to run one)
2. Reassign or remove unused licences
3. Right-size plans based on actual usage data from the Microsoft 365 admin centre
4. Decide who, if anyone, needs full Copilot
5. Review your CSP agreement and billing terms, including monthly versus annual

Absorb the price rise by tidying the licences you own

We manage Microsoft 365 tenants for London businesses of every size, from 5-person startups to 500-seat firms. Our free review goes through your licences and comes back as a written report: where you are overspending today, what the July increase costs you if you change nothing, and a phased Copilot plan if one makes sense for your team.