February 16, 2026
On December 4, Microsoft announced a global price and packaging update for select Microsoft 365 commercial suites and standalone components, including Enterprise, Business, Frontline, and Government commercial equivalents. Standalone Microsoft Teams and Copilot SKUs are not included in this update. See timing details below.
- Pricing updates take effect July 1, 2026.
- Packaging updates begin rolling out in June 2026.
- Existing customers remain on current pricing until renewal.
- Customers will receive at least 30 days notice in Message Center before packaging changes become available in their tenant.
Prices are rising because AI software is being auto-added
The increase in subscription prices is to cover the cost of Artificial Intelligence (AI) features being auto-added to your plans. These include the Copilot app – a tool that can assist with various tasks, such as helping you to write in Word – and graphic design tool Microsoft Designer, which can help you to create images in PowerPoint, for example.
This will impact virtually all Microsoft 365 and Office 365 plans for businesses – with list price increases generally ranging from around 4–10% for most enterprise and SMB products, and up to 25–33% on a few lower-cost plans. The UK will mirror these changes (approximately equivalent percentage uplifts in GBP pricing), since these are global list adjustments (separate from any currency exchange tweaks). Below, we detail the increases by product, the context for UK customers, comparisons to past Microsoft pricing moves, and steps you can take to mitigate these costs like removing teams – especially important for Enterprise Agreement (EA) customers who also face the removal of volume-based discounts as of late 2025.
Please note table below is only a guide and these can change due to exchange rates and when new products are added, or when MS decide
| Product | Description | New Price (per licence/monthly) |
| Microsoft 365 Apps for business | Best for businesses that need Office apps across devices and cloud file storage. Professional email and Microsoft Teams not included. For businesses with up to 300 employees. | £12.95+Vat |
| Microsoft 365 Apps for enterprise | The premium Office suite for organizations – including Word, Excel, PowerPoint, Outlook, OneNote, Access, and Skype for Business – plus online file storage and sharing. Connected to the cloud, enabling you to roam between your devices of choice as part of the Office 365 experience. | £20.00+vat |
| Microsoft 365 Business Basic | Best for businesses that need professional email, cloud file storage, and online meetings & chat. Desktop versions of Office apps like Excel, Word, and PowerPoint not included. For businesses with up to 300 employees. | £7.60+vat |
| Microsoft 365 Business Basic (no Teams) | Best for businesses that need professional email, cloud file storage, and web versions of Office apps like Excel, Word, and PowerPoint. For businesses with up to 300 employees. Does not include Microsoft Teams. | £6.20+vat |
| Microsoft 365 Business Standard | Standard Best for businesses that need Office apps across devices plus professional email, cloud file storage, and online meetings & chat | £14.55+Vat |
| Microsoft 365 Business Standard (no Teams) | Best for businesses that need Office apps across devices plus professional email and cloud file storage. For businesses with up to 300 employees. Does not include Microsoft Teams. | £12.95+Vat |
| Microsoft 365 Business Premium | Best for businesses that need all the apps and services included in Business Standard plus advanced cyber threat protection and device management. For businesses with up to 300 employees. | £24.90+Vat |
| Microsoft 365 Copilot | Microsoft 365 Copilot Business is AI built for the way work is evolving—secure, integrated, and business-ready from day one. It’s infused with Microsoft’s unmatched expertise in the realities of work—how teams collaborate, how decisions get made, and how business actually runs. Backed by Microsoft’s trusted cloud, it delivers enterprise-grade productivity and security at a price tailored for small businesses. Limited to 300 seats, and only attachable to Microsoft 365 Business (Business Basic, Business Standard, Business Premium, Apps for Business). | £22+vat |
| Microsoft 365 E3 | Office 365 E3, Enterprise Mobility + Security E3, and Windows 10/11 Enterprise E3. This per-user licensed suite of products offers users best-in-class productivity across devices while providing IT security and control. | £46+vat |
| Microsoft Teams Enterprise | Microsoft Teams Enterprise is a paid Teams standalone SKU intended to complement our Office 365 (no Teams) and Microsoft 365 (no Teams) suites for enterprise customers. | £10.10+Vat |
| Microsoft Entra ID P1 | Microsoft Entra ID P1 provides single sign-on to thousands of cloud (SaaS) apps and access to web apps you run on-premises. Built for ease of use, Microsoft Entra ID P1 features multi-factor authentication (MFA); access control based on device health, user location, and identity; and holistic security reports, audits, and alerts | £7.80+Vat |
| Microsoft Entra ID P2 | Microsoft Entra ID P2: A comprehensive cloud Identity and access management solution with advanced identity protection for all your users and administrators | £10.40+vat |
