Microsoft 365 renewals · Published 24 October 2026

Microsoft 365 price rise July 2026: what UK small businesses will pay at renewal

By Ben Harding. Figures checked 21 October 2026. Independent analysis. I'm not affiliated with Microsoft or with any Microsoft partner.

Microsoft raised Microsoft 365 list prices on 1 July 2026. Many UK small businesses haven't felt it yet. That's not because the rise skipped them. It's because of how renewals work. This article explains when the increase reaches you, what Microsoft's UK list currently shows, and what to check on your quote before you sign.

What changed on 1 July 2026

Microsoft published the new prices in US dollars. The headline changes for the plans most small businesses use:

Source: Microsoft licensing news, "2026 Microsoft 365 packaging and pricing updates".

Feature (packaging) changes started rolling out from June 2026 whether or not your price had changed yet. Teams standalone and Copilot SKUs weren't part of this increase.

Why many firms haven't noticed yet

Existing customers keep their current price until renewal. If your annual subscription started in March 2026, you're paying the old price until March 2027. The new price then arrives inside a renewal quote, often with other changes bundled in, and often in the same week the invoice is due.

That timing is the real risk. A price rise you know about is a budgeting exercise. A price rise you find on the renewal invoice gets paid because there's no time to question it.

What Microsoft's UK list shows today

Partner websites quote different UK figures, so I checked Microsoft's own UK pricing pages in a browser on 21 October 2026. All prices are per user per month, ex VAT, annual commitment paid yearly:

Two things stand out.

Business Standard and Premium are now sold "with Copilot" on Microsoft's UK page. If your previous invoice showed a much lower Business Standard price, the jump on your renewal may come from both the July change and a different plan version. Ask your partner exactly which version they're quoting. Microsoft also notes that usage-based billing for some advanced AI features may add charges on Copilot-inclusive plans, so set a spending policy and know who owns it.

The Standard-to-Premium gap is £6.50 per user per month on the UK list (£18.10 vs £24.60). In the US pricing, Premium didn't rise and Standard did, so the gap narrowed. Some partners are using that to suggest upgrades. That may be right for you, since Premium adds security and device management, but decide it on need, not on the size of the gap.

Worked example: a 20-person firm

Take a firm with 20 users on Business Standard.

• At today's UK list price (£18.10, annual, paid yearly): 20 × £18.10 × 12 = £4,344 a year ex VAT.
• If your current price is lower and the full 12% increase passes through, a firm paying £6,000 a year for Business Standard before the change would pay about £6,720 at renewal, or £720 more for the same seats.
• If the same 20 users moved to Business Premium: 20 × £24.60 × 12 = £5,904 a year, which is £1,560 more than Standard.

The exact figures on your quote will depend on your partner's pricing, your billing frequency and your plan versions. That's why the only reliable starting point is your own quote, not a published list.

The other 2026 changes that affect your renewal total

The July increase rarely arrives on its own. When you review the quote, check these too:

1. Billing frequency. Since April 2025, annual subscriptions billed monthly cost 5% more than paying upfront. The monthly prices shown on Microsoft's UK page are 20% above the annual-paid-yearly price (for example, Business Standard £21.72 vs £18.10).
2. The seven-day window. Under Microsoft's new-commerce rules, you can only cut seats on an annual subscription within seven calendar days of purchase or renewal. Miss it and you pay for those seats until the next renewal.
3. Teams or no Teams. The no-Teams versions are cheaper (£1.20 to £6.60 per user per month on the UK list). That only saves money if you genuinely don't need Teams, or already pay for an alternative.
4. Copilot. The Copilot Business add-on has a UK promotional price of £13.80 per user per month (list £16.10). It runs 1 July to 31 December 2026, for the first year only, for existing eligible Business customers. Budget for the list price in year two.

A renewal checklist for UK small businesses

Use this 60 to 90 days before your renewal date:

1. Find your renewal date. It's on your partner's invoice or in the Microsoft 365 admin centre under Billing. Diary the date and the date seven days after it.
2. Get a written quote early. Ask for per-user prices by plan, the billing frequency, the term length, and the exact plan names (including "with Copilot" or "no Teams" versions).
3. Compare it with what you pay now. Line by line: seats, price per seat, annual total.
4. Reconcile seats against real people. Remove leavers, check shared mailboxes, and question licences assigned to accounts that are blocked from signing in.
5. Decide your billing frequency. Annual upfront is cheapest. Keep monthly only for seats you might genuinely drop.
6. Decide about Teams and Copilot on purpose, not by default.
7. Sign before the deadline, then use the seven days to correct anything that's wrong.

How to work out your own number

I built a free, offline UK M365 Renewal Cost Calculator for this. You enter seat counts and the prices on your quote, and it shows your annual spend and what a 5%, 10% or 20% avoidable cost would mean in pounds. It runs in your browser, needs no tenant access, and no partner will phone you about it.

Download the free calculator

If you want to compare options rather than just total them, the UK M365 2026 Plan-Mix Optimiser (£29) puts up to eight scenarios side by side, such as paying annually, removing unused seats, moving light users to Basic or switching to the "with Copilot" bundles, and shows the annual saving in pounds against doing nothing. It also has no Microsoft sign-in and no tenant access.

About the author: Ben Harding is a UK-based business systems specialist with around 20 years' experience in Power BI, SQL Server and business systems, including time at Dstl. He builds independent renewal and licensing tools for UK organisations at M365 Renewal Tools.

Not affiliated with Microsoft. Microsoft, Microsoft 365, Teams and Copilot are trademarks of the Microsoft group of companies. Prices are Microsoft UK list prices checked on 21 October 2026, ex VAT, and may change. Partner prices vary. Always use your own quote. This article is general information, not financial or licensing advice, and doesn't guarantee any saving.