Microsoft 365 Price: UK Business Pricing Guide 2025

Ollie Hill-Haimes, Sales Director 6 min read · Updated June 2026

What is the Office 365 price for UK business plans in 2025?

Microsoft 365 Business plans for UK organisations are priced per user, per month, on an annual commitment and excluding VAT. The three Business tiers cover most SMEs, with Enterprise tiers reserved for larger or compliance-heavy estates. Confirmed list prices for Business Basic, Standard and Premium are published by Microsoft.

The headline figures (per user, per month, ex VAT, annual commitment):

Business Basic, Standard and Premium prices are confirmed against Microsoft's UK Microsoft 365 pricing; the Enterprise E3, E5 and Frontline F3 figures are Microsoft UK list prices as of 2026. If you are weighing the security tier, our view on Microsoft 365 security explains why Premium is usually the right call for UK SMEs.

What does each Office 365 price tier actually include?

Each step up the price ladder adds a distinct capability: Basic gives you cloud apps, Standard adds installed desktop Office, and Premium layers on enterprise security. Understanding what changes between tiers stops you overpaying for features you won't use — or underbuying and leaving gaps.

Business Basic — £4.60/user/month. The entry paid plan. Includes Teams with full meeting features, Exchange Online (50GB mailbox), OneDrive (1TB), SharePoint, and the web-based versions of Word, Excel and PowerPoint. It does not include installed desktop Office apps. Suitable for businesses that work mainly in a browser with straightforward requirements.

Business Standard — £9.60/user/month. The most widely bought plan for UK SMEs. Adds full desktop installs of Word, Excel, PowerPoint, Outlook and OneNote on up to five devices per user, plus Teams Webinars and Microsoft Bookings. Everything in Basic is included.

Business Premium — £16.90/user/month. Adds enterprise-grade security on top of Standard: Microsoft Defender for Business for endpoint protection, Intune for device management, Microsoft Entra ID Premium P1 for conditional access, and Purview data protection. For any UK business handling client data, this is the tier we recommend by default.

Enterprise E3 — £30.20/user/month. Unlimited Office installs, 100GB Exchange mailbox with unlimited archiving, litigation hold, eDiscovery, a Windows Enterprise licence and Entra ID Premium P1. Aimed at organisations above 300 users or those needing advanced compliance.

Enterprise E5 — £47.80/user/month. Microsoft's top tier, adding Defender for Endpoint Plan 2, Defender for Identity, Entra ID Premium P2, Teams Audio Conferencing and Power BI Pro. Built for security-mature estates that want comprehensive threat protection in one licence.

How does annual vs monthly Office 365 pricing work?

The prices above assume an annual commitment billed monthly. A monthly rolling subscription with no annual lock-in costs roughly 20% more per user. Annual prepay (paying the full year upfront) lands at the same per-unit cost as annual monthly billing, so the choice is really annual versus flexible.

For most established businesses, annual commitment is the right choice — you are running these apps every day and the discount is real. Monthly rolling licences earn their keep for temporary staff, contractors and seasonal hires, where you want to add and remove users without carrying a full year of cost. A sensible estate mixes both: annual for permanent staff, monthly for the churn.

What add-on costs sit on top of the Office 365 price?

Several capabilities are not in the base plans and are bought as add-ons. Budget for them upfront, because they are the line items that surprise finance teams after the core licences are signed off. The most common are telephony, backup and advanced analytics.

• Teams Phone / Calling Plan — approximately £8–12/user/month (typical UK 2026 range) for UK domestic PSTN calling. If you are moving your phone system into Teams, our guide to Microsoft Teams calling covers the licensing routes.
• Microsoft 365 Backup — Microsoft launched native backup in 2024, but third-party Microsoft 365 backup remains the more common and more flexible choice for retention and recovery.
• Power BI Pro — approximately £8–9/user/month (2026 UK list price; already included in E5).
• Defender for Endpoint Plan 2 — available as a standalone add-on for E3 tenants wanting endpoint EDR without jumping to E5.

Do Office 365 prices include VAT?

No. Every Microsoft 365 price quoted here — and on Microsoft's own UK pricing pages — is exclusive of VAT. UK businesses pay 20% VAT on top, shown separately on the invoice. When you compare total cost of ownership across vendors, make sure you are comparing ex-VAT figures throughout, or the numbers will not line up.

This matters most when a reseller quotes an "all-in" managed price. Ask whether the figure is ex or inc VAT, and whether support is bundled or billed separately. A clear breakdown is the difference between a comparable quote and a misleading one.

Should UK SMEs buy direct or through a managed provider?

Buying licences direct gets you the list price and nothing else — procurement, setup, security hardening and ongoing management are on you. A managed Microsoft 365 provider buys through the same Microsoft programme but adds configuration, security and a single point of accountability. For a 10–500 staff business without a full in-house IT team, that is usually the better economics.

AMVIA provides Microsoft 365 licences for UK businesses alongside managed IT support and a fully managed Microsoft 365 service. One provider, security-first, with Microsoft-certified engineers handling procurement, setup and day-to-day management — so the licence you pay for is actually configured to protect you.