Microsoft put its UK commercial prices up on 1 July 2026. If you run a small business or look after IT for one, you have probably already had an email from a reseller about it, or you will get one the moment your renewal comes round. The increase is real, but the panic around it is mostly unnecessary.
Here is the honest version. The price rise itself is not the thing that costs businesses money. Renewing on autopilot is. Most SMEs are paying for the wrong mix of licences, on the wrong billing term, for people who left months ago. A price increase is simply the moment that carelessness starts to bite.
We look after Microsoft 365 for organisations across Northampton and the wider UK, so we have spent the summer working through renewals with clients. This post explains what changed, who it affects and when, and the practical steps we take to keep the bill sensible.
What actually changed on 1 July 2026?
Microsoft increased list prices on several of its Business plans as part of a wider commercial pricing update. The two that matter most to SMEs are Business Basic and Business Standard. Business Premium was left alone in the changes we have seen, which is worth sitting with for a moment because it changes the maths later on.
The figures below are approximate UK per-user monthly prices excluding VAT. Treat them as a guide for planning, not a quote. Microsoft list prices move, resellers add their own margin, and your exact number depends on your agreement and billing term. Always check your own renewal quote against the live figures.
| Business plan | Rough price before | Rough price after (from 1 July 2026) | Approx increase |
|---|---|---|---|
| Business Basic | Around £4.90 per user / month | Around £5.60 per user / month | Roughly 16% |
| Business Standard | Around £10.30 per user / month | Around £11.50 per user / month | Roughly 12% |
| Business Premium | Around £16.60 per user / month | No change reported | 0% |
All prices exclude VAT and assume an annual commitment. Monthly commitment plans cost more per user, and that gap has quietly widened over the last couple of years. If you are on a monthly rolling plan because it felt flexible, this is a good moment to work out what that flexibility is really costing you.
You can confirm the current published figures on Microsoft's own Business plan comparison page, which is the only price you should ever treat as authoritative.
When does the increase hit you?
This is the part that causes the most confusion, so let us be clear.
- New customers pay the new prices straight away.
- Existing customers generally keep their current price until their first renewal on or after 1 July 2026. At that renewal, the new price applies.
So if your annual term runs to November, nothing changes for you until November. That breathing space matters, because it gives you time to review your licensing properly rather than reacting on the day. We have seen organisations panic-renew a week before their term ended and lock in a bad mix for another year. Do not do that.
The point most resellers skip: a price increase is only bad news if you renew exactly what you had last year. The businesses that come out of this flat, or even cheaper, are the ones that treat the renewal as a review rather than a formality.
Why a small percentage still adds up
A 12 to 16 percent rise on a single licence sounds trivial. Across a team it is less so, and it compounds every year. Here is a quick illustration for Business Standard at roughly £11.50 per user per month after the change.
| Users | Rough annual cost before | Rough annual cost after | Extra per year |
|---|---|---|---|
| 5 | £618 | £690 | £72 |
| 20 | £2,472 | £2,760 | £288 |
| 50 | £6,180 | £6,900 | £720 |
| 100 | £12,360 | £13,800 | £1,440 |
None of that is catastrophic. But notice how the extra spend scales with headcount and licence count, not with value. If ten of those users barely touch anything beyond email, you are now paying more for capability they never use. That is the real cost, and it was there before the price rise too.
The mistakes we see at renewal
Every renewal season we find the same handful of avoidable problems. They are boring, and that is exactly why they get missed.
Paying for people who have left
Leavers whose accounts were never removed, or were only blocked rather than unlicensed. We regularly find businesses paying for five or ten ghosts. Reassigning or removing those licences is the single quickest saving available to most SMEs.
Everyone on the same plan out of habit
It is tidy to put every user on Business Standard. It is rarely the cheapest sensible option. Frontline and occasional users often do not need the desktop apps, and there are lighter plans built for exactly that. A mixed licensing model takes a little thought and saves real money.
Monthly billing that nobody chose
Monthly commitment made sense during a specific project or a period of uncertainty, then quietly became permanent. If your team size is stable, an annual commitment is cheaper. Honestly this is where a lot of quiet overspend lives.
Buying security twice
This one runs the other way. Plenty of SMEs pay for Business Standard plus a separate bundle of third-party security tools that Business Premium would cover for less. We come back to that below because it is the most useful decision on the table this year.
Does Business Premium now make more sense?
Because Business Premium did not go up while Basic and Standard did, the gap between Standard and Premium narrowed. That quietly changes the recommendation for a lot of businesses.
Business Premium includes the identity, device management and email security features that many SMEs currently buy separately or, worse, go without. If you are already paying for Standard and bolting on third-party multi-factor tooling, endpoint protection or advanced email filtering, add those costs up honestly. There is a fair chance Premium is cheaper than your current total, and it is certainly simpler to run.
We are not saying everyone should move to Premium. A business with a mature, well-run third-party security stack may have no reason to change. But if your security is a patchwork of separate subscriptions and good intentions, this price change is the nudge to work out the real comparison. Our Microsoft 365 consultants in Northampton do this calculation with clients constantly, and Premium wins more often than people expect.
If you want to understand the security features Premium brings in, Microsoft's Business Premium documentation lays out identity protection, Intune device management and Defender in plain terms.
What about Copilot in all this?
You cannot look at 2026 pricing without Copilot coming up, because Microsoft has been pushing it hard alongside these changes. Keep the two decisions separate in your head. The price increase applies whether or not you ever touch AI. Do not let a renewal conversation turn into an upsell you did not plan for.
Copilot can be genuinely useful, but only if your data is tidy enough for it to be safe. If your SharePoint permissions are a mess, adding AI on top makes the mess easier to stumble into, not harder. We wrote separately about whether Copilot is worth it and how to get a tenant ready for it, and our Copilot readiness service exists precisely so businesses do not buy the licences before the groundwork is done. Sort the renewal first. Decide on Copilot on its own merits, later, with a clear head.
Your renewal checklist
Before you accept any renewal quote this year, work through this. It takes an afternoon and usually pays for itself many times over.
- Find your exact renewal date and confirm your current price is protected until then.
- Pull a full list of licensed users and cross-check it against who actually works here today.
- Remove or reassign every licence tied to a leaver.
- Split users by what they really need, so occasional users are not on full plans by default.
- Add up any separate security subscriptions and compare the total against Business Premium.
- Check whether you are on monthly or annual commitment, and price both.
- Get the renewal quote itemised, line by line, not as a single lump figure.
- Keep any Copilot decision as a separate, deliberate choice rather than a renewal add-on.
If a provider hands you a renewal that is just last year's order with a higher number on it, push back. That is not advice, it is order-taking.
How we approach it
When we run a licensing review, we start with what your business actually does rather than what you happen to be paying for. We look at who uses what, where security really sits, and whether the plan mix matches reality. Then we model the options, including the honest downsides, so you can make a decision you understand.
The price increase is a fixed fact. What you do about it is not. Reviewed properly, plenty of businesses land at the same annual spend as before, or lower, with better security and fewer wasted licences. That is a much better outcome than simply absorbing a higher bill and moving on.
Get a Microsoft 365 licensing review before you renew
We will check your users, plans and security against what you actually need, then give you a clear, itemised recommendation. No upsell, no guesswork, just the sensible number.
Book a Licensing Review