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Microsoft 365 pricing

The July 2026 Microsoft 365 price rise: what UK businesses now pay

Microsoft increased its business plan prices on 1 July 2026. Business Standard went up by 12.5% and Business Basic by over 17%. Here is the before-and-after, when it reaches your invoice, and the legitimate ways to bring the bill back down.

  • Updated 5 October 2026
  • 3 minute read
  • Written by our UK engineers

The new UK prices

These are Microsoft’s UK list prices for an annual subscription paid yearly, per user per month, excluding VAT. The US dollar list prices moved in the same direction: Business Basic from $6 to $7, Business Standard from $12.50 to $14, with Business Premium held at $22.

PlanBefore 1 July 2026From 1 July 2026Change
Microsoft 365 Business Basic £4.60 £5.40 +17%
Microsoft 365 Business Standard £9.60 £10.80 +12%
Microsoft 365 Business Premium £16.90 £16.90 No change

Resellers and Cloud Solution Provider partners set their own prices, so what you pay may differ slightly from list — but the direction of travel is the same everywhere.

When the increase reaches your invoice

If you took out a new subscription on or after 1 July 2026, you are already paying the new price. If you were an existing customer, the increase applies at your first renewal on or after 1 July 2026. For a business on an annual commitment that renewed in, say, March 2026, the higher price arrives in March 2027 — which is why many businesses have not noticed it yet.

Find your renewal date in the Microsoft 365 admin centre under Billing → Your products, or ask whoever you buy your licences through. That date is your deadline for any of the changes below.

What it costs a typical business

Business Standard is the plan most small businesses are on, because it includes the desktop Office apps. Here is what the rise means in a year, alongside a hosted Exchange mailbox for comparison:

OrganisationBusiness Standard, beforeBusiness Standard, nowBusiness Basic, nowHosted Exchange (no commitment)
10 users £1,152.00 £1,296.00 £648.00 £960.00
25 users £2,880.00 £3,240.00 £1,620.00 £2,400.00
50 users £5,760.00 £6,480.00 £3,240.00 £4,800.00

All figures are per year, ex VAT. The Microsoft figures assume an annual commitment; ours do not. Business Standard includes Teams, SharePoint, OneDrive and the desktop Office apps. Business Basic includes the same 100 GB mailbox and Teams, but only the web and mobile versions of Office — and for email-only users it is the cheapest of the three.

The Copilot bundles

Microsoft’s UK pricing page now leads with plans that bundle Microsoft 365 Copilot: Business Standard with Copilot at £18.10 per user per month, and Business Premium with Copilot at £24.60, both on annual commitments. If your organisation has a genuine use for Copilot those bundles may suit you. If it does not, make sure you are not being moved onto them by default at renewal — check exactly which product is on your next invoice.

Six legitimate ways to pay less

  1. Remove licences from people who have left. It is the most common waste we find. A licence stays billable until it is unassigned and the licence count reduced.
  2. Turn leavers’ mailboxes into shared mailboxes. In Exchange Online a shared mailbox under 50 GB does not need a licence, so you keep the mail without paying for it. Our guide to shared mailbox licensing covers the exceptions.
  3. Right-size each user. Not everyone needs Business Standard. Staff who only need email, Teams and the web versions of Office may be fine on Business Basic, at half the price.
  4. Pay annually if you can. Microsoft charges more for monthly billing than for paying the same annual commitment upfront.
  5. Do not pay for room and resource mailboxes. Meeting rooms and pool cars need resource mailboxes, not licensed users.
  6. Ask what you actually use. If your team works from email, a shared calendar and a file server, you may be paying Business Standard prices for what Business Basic would cover. If what matters is UK-only hosting and support, or a like-for-like move off your own Exchange server, hosted Exchange is the other option worth pricing.

When moving away from Microsoft 365 is the wrong answer

We sell both, so we will say it plainly: if your business runs on Teams for calls and chat, keeps its documents in SharePoint and OneDrive, or relies on Intune and conditional access to manage devices, stay on Microsoft 365. Moving email elsewhere while keeping the rest is usually a false economy, and the July 2026 rise does not change that.

Hosted Exchange makes sense when email and calendars are what you actually use, when UK data residency or a named support engineer matters to you, or when you want to avoid annual commitments. Our side-by-side comparison goes through it in detail.

Sources

Questions

Frequently asked

Did Microsoft 365 Business Premium go up in July 2026?

No. Business Premium was held at £16.90 per user per month on an annual commitment, ex VAT, while Business Basic and Business Standard both increased. Some businesses are using that narrower gap as a reason to move from Standard to Premium for its security features.

I renewed just before 1 July 2026. When will I pay the new price?

At your first renewal on or after 1 July 2026. If you are on an annual commitment that renewed before 1 July, your current price holds until that commitment ends.

Is hosted Exchange cheaper than Microsoft 365?

Not always, and it depends which plan you compare. Our mailbox is £8.00 + VAT per month with 50 GB and no commitment — cheaper than Business Standard at £10.80, but more than Business Basic at £5.40 on an annual commitment, which includes a 100 GB mailbox. Businesses choose hosted Exchange for UK-only hosting and support, a named engineer and a like-for-like move off their own Exchange server, not because it is the cheapest email available.

Can we keep the Office desktop apps if we move our email?

Yes. Microsoft 365 Apps for business provides the desktop Office apps without an Exchange Online mailbox, and works with any Exchange mailbox, including hosted Exchange. We can supply it as an add-on.

Paying suite prices for a mailbox?

Send us your user count and what your team actually uses. We will tell you honestly whether hosted Exchange or Microsoft 365 is the better fit — and quote you for either.

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