Microsoft moved business pricing on 1 July 2026 and restructured what the plans contain at the same time. For most UK businesses that means a renewal quote noticeably higher than the last one, and a genuine decision to make rather than a rubber stamp.
Here is what actually changed, what it costs and the review worth doing before you sign.
What changed
Two things at once, which is why the change has caused so much confusion.
Prices went up. The global uplift moved Business Standard from around $12.50 to $14 per user per month. UK plans rose broadly in line, with Business Basic and Business Standard reported in the region of twelve to seventeen per cent higher. The increase applies at your next renewal rather than on the day, so businesses are meeting it on a rolling basis through the rest of 2026.
Copilot became part of the plans. Rather than only selling Copilot as a per-user add-on, Microsoft began offering Business Standard and Business Premium as permanent variants with Copilot included, with Business Standard plus Copilot announced at around $23.50 per user per month. There is also a lower-cost Copilot tier aimed specifically at smaller businesses.
The practical effect is that the old question — should we add Copilot — has become a plan selection question, and the arithmetic is different.
What this means at renewal
For a ten-user business the shape of the decision is now roughly this:
- Stay on your current plan. Cheapest headline figure, and you absorb the uplift. Fine if nobody is going to use AI this year.
- Move to a Copilot-inclusive plan. More per user, but replaces a separate AI subscription and puts the assistant inside the applications people already have open.
- Stay on your plan and buy a separate assistant. Sometimes cheaper if only two or three people need AI, since you are not paying for it across the whole team.
The third option is the one most small businesses overlook and it is frequently the right answer. Copilot bundled across ten users when three people would use it is not a saving.
Bundling only saves money when most of the team would have used the thing being bundled. Otherwise it is a very tidy way of paying for seven licences nobody opens.
The review worth doing first
Before comparing plans, do the boring audit. In almost every business we look at, it finds more money than the plan choice does.
Unused licences
Between five and fifteen per cent of licences in a typical small business are assigned to people who have left, to accounts created for a project that ended or to duplicates. At £11 to £18 a user a month, ten stale licences is well over a thousand pounds a year.
Shared mailboxes that are paying for a licence
A shared mailbox under 50GB does not need a licence. Plenty of businesses have info@, accounts@ and sales@ sitting on full user licences because they were set up that way years ago and nobody revisited it.
People on the wrong plan
Not everyone needs the same thing. A field engineer who uses email on a phone and nothing else does not need the same licence as somebody living in Excel all day. Mixed licensing is entirely normal and Microsoft supports it in the same tenancy.
Monthly versus annual
Monthly commitment carries a premium of roughly twenty per cent for the flexibility. If your headcount is stable, annual is the obvious choice. If you are seasonal, keep a core of annual licences and flex the rest monthly.
Do not cut the wrong thing
When a renewal quote jumps, the instinct is to downgrade. Two downgrades are usually false economies.
Dropping Business Premium to Standard removes Intune device management, Entra ID Plan 1, Defender for Office 365 and information protection. Those are the controls that most UK businesses now need in order to answer client security questionnaires and to hold Cyber Essentials comfortably. Buying them back separately costs more than the plan did. We covered what is in there in this article.
Dropping backup because Microsoft holds the data. Microsoft's retention is not backup, and the shared responsibility model is explicit about it. That is covered separately in how to back up Microsoft 365.
A sensible order of operations
- Audit licences six weeks before renewal. Remove the dead ones.
- Right-size plans per person rather than across the business.
- Decide on AI honestly — how many people would genuinely use it weekly?
- Compare three options: current plan, Copilot-inclusive plan, current plan plus a handful of separate assistant licences.
- Commit annually for the stable core.
Most businesses that do this land within a few per cent of their old total spend despite the increase, because the audit funds the uplift.
If you would like somebody to run that audit and give you the three-way comparison with real numbers for your tenancy, that is standard work for our managed IT team. Send us your renewal date and we will do the arithmetic before you have to sign anything.
