Microsoft 365 Copilot Business costs £16.10 per user per month in the UK — or £13.80 until 31 March 2026 under the current promotional rate. You do not need an enterprise agreement, an E3 or E5 licence, or a minimum seat count above 1. Any UK business with a Microsoft 365 Business Basic (£4.60/user/month), Business Standard (£9.60/user/month), or Business Premium plan can add Copilot as an annual add-on for up to 300 users. The three technical prerequisites are an Exchange Online mailbox, a Microsoft Entra ID account, and cloud-based Microsoft 365 Apps. For a 20-person team on Business Standard, the total monthly cost is £25.70 per user — or £514 across the company. Factor in the July 2026 price rises and that drops Business Premium into striking distance of Standard-plus-Copilot, making now the right time to lock in annual pricing.
What You Actually Need to Buy
The old 300-seat minimum for Copilot is gone. Microsoft scrapped it in late 2024, and from December 2025 launched Copilot Business — a dedicated SKU aimed at companies with fewer than 300 users.
That means a 20-person accountancy practice in Manchester has the same access as a 10,000-seat bank in Canary Wharf. The difference is you buy through a Microsoft 365 Business plan rather than an Enterprise Agreement.
Here is what the licence stack looks like for a small UK team:
Your base plan sits at the bottom. Copilot Business bolts on top. Both bill annually through the Microsoft 365 admin centre or your Microsoft partner.
Picking the Right Base Plan
Not every Microsoft 365 Business plan gives you the same Copilot experience. All three — Basic, Standard, and Premium — qualify, but what you get from Copilot depends on what apps your plan includes.
Business Basic gives you web and mobile versions of Word, Excel, and PowerPoint plus Exchange Online, OneDrive, and Teams. Copilot works in all of these. But you miss out on Copilot in the desktop apps — because Basic does not include desktop Office apps at all.
Business Standard unlocks the full desktop suite. That means Copilot in Word on your desktop, Copilot in Excel with your local spreadsheets, Copilot in PowerPoint creating decks from your files. For teams doing real day-to-day work, this is the sweet spot.
Business Premium adds everything in Standard plus Intune device management, Azure Information Protection, and advanced threat protection. If your team handles sensitive client data — and under UK GDPR they likely do — Premium's security stack matters. And here is the kicker: Business Premium is the one plan that is not going up in price in July 2026.
The Real Monthly Cost for a 20-Person Team
Monthly Per-User Cost by M365 Plan Plus Copilot Business (GBP)
Total monthly cost combining base Microsoft 365 plan and Copilot Business add-on at current promotional rate, showing Business Premium as increasingly competitive
Source: Microsoft UK Pricing, February 2026
Let us do the maths properly. All prices exclude VAT and are billed annually.
On Business Standard at £9.60 per user plus Copilot Business at £13.80 per user (promotional rate), you are paying £23.40 per user per month. For 20 people, that is £468 a month or £5,616 a year.
Once the promotional pricing ends on 31 March 2026, Copilot goes to £16.10. That pushes the per-user total to £25.70 and the annual bill to £6,168.
Now look at Business Premium. The base plan costs more — roughly £16.60 per user per month — but it includes Intune, advanced threat protection, and Azure Information Protection that you would otherwise buy separately. When Microsoft folds Copilot into premium plans from July 2026, Premium-plus-Copilot becomes the simplest and cheapest route for security-conscious SMBs.
Three Technical Prerequisites You Cannot Skip
Before you buy a single Copilot licence, make sure these three boxes are ticked. Miss one and the deployment stalls.
1. Exchange Online mailbox. Copilot reads your emails, calendar, and meeting data to generate summaries and draft replies. If anyone on your team is still running on-premises Exchange, they need to move to Exchange Online first. For a 20-person company this is straightforward — the team will already be on Exchange Online through their M365 Business plan.
2. Microsoft Entra ID account. This is the identity layer that used to be called Azure Active Directory. Every user needs an Entra ID account. Again, if you are on any M365 Business plan, you already have this. Check it at entra.microsoft.com.
3. Cloud-based Microsoft 365 Apps. Copilot runs in the cloud-connected versions of Word, Excel, PowerPoint, Outlook, and Teams. If anyone has been using standalone Office 2019 or Office 2021 perpetual licences, those will not work. They need to be on the Microsoft 365 Apps subscription. Business Standard and Premium both include these.
Data Governance Before You Switch On
Top Barriers to Copilot Adoption Among IT Leaders
Data governance dominates IT leader concerns, ahead of cost and user readiness — a pattern that holds for SMBs where permissions are typically looser
Source: Gartner 2025 Microsoft 365 and Copilot Survey
This is the part that trips up small businesses repeatedly. Copilot reads everything your Microsoft 365 environment can see — emails, SharePoint files, OneDrive documents, Teams messages. If your file permissions are loose (and in a 20-person company, they usually are), Copilot will surface documents that users probably should not have access to.
Nearly half of IT leaders flagged data governance as their biggest concern when deploying Copilot, according to Gartner's 2025 Microsoft 365 and Copilot Survey. For a small business, the fix is simpler than it sounds:
Run a SharePoint access review. Check who can see what. Tighten permissions on HR folders, finance documents, and board papers. Use sensitivity labels — they come free with Business Premium or as an add-on with Standard.
Set up a basic data classification policy. Label documents as Public, Internal, Confidential, or Restricted. Copilot respects these labels. A user with Internal access will not see Confidential documents in their Copilot results.
This does not need to be a six-month project. For a 20-person company, two days of focused work on SharePoint permissions and sensitivity labels puts you in a solid position.
The July 2026 Price Rise and What to Do About It
M365 Business Plan Pricing Before and After July 2026 (GBP per user/month)
Business Premium stays flat while Basic and Standard both increase, narrowing the price gap and making Premium the smarter long-term choice
Source: Microsoft Commercial Pricing Update, December 2025
Microsoft confirmed in December 2025 that commercial Microsoft 365 prices will increase globally from 1 July 2026. UK organisations will see the same percentage changes reflected in GBP pricing, with final figures due in late May 2026.
Business Basic and Business Standard are going up. Business Premium and E1 are staying flat. Frontline licences (F1 and F3) face the steepest rises — up to 33%.
The smart move for UK SMBs is clear: if your annual renewal falls before 30 June 2026, lock in current pricing. That freezes your rate for 12 months, delaying the increase until July 2027. If you are thinking about upgrading from Standard to Premium, the narrowing price gap makes this the best time in years.
Rolling Out Copilot in Phases
Do not buy 20 licences on day one. Start with 5. Pick your five heaviest document users — the people drowning in email, writing proposals, or building spreadsheets every day.
Week 1-2: Pilot group of 5 users. Focus on Copilot in Outlook (email summarisation, draft replies) and Teams (meeting summaries, action items). These are the quickest wins and need the least training.
Week 3-4: Expand to 10 users. Add Copilot in Word (document drafting, rewriting) and PowerPoint (presentation generation). Run a brief 30-minute training session — Microsoft's Copilot Adoption Hub has free resources built for small businesses.
Week 5-8: Full rollout. By this point your pilot group can champion the tool internally. Roll out to remaining users and introduce Copilot in Excel for data analysis.
Track usage through the Microsoft 365 admin centre's Copilot dashboard. It shows who is using Copilot, which apps they are using it in, and at what rate they engage. If someone has had a licence for a month and never touched it, reassign it to someone who will.
UK-Specific Considerations
All Microsoft 365 data for UK business plans is processed and stored in Microsoft's UK data centres — Azure UK South (London) and Azure UK West (Cardiff). This matters for businesses subject to UK GDPR, FCA requirements, or public sector data handling rules.
Copilot prompts and responses are processed within your Microsoft 365 tenant boundary. Microsoft states that your data is not used to train the foundation models. For regulated industries, this is the key differentiator between Copilot and consumer AI tools like ChatGPT.
If you are in financial services and subject to FCA operational resilience requirements, document your Copilot deployment as part of your Important Business Services mapping. The ICO also expects you to complete a Data Protection Impact Assessment before deploying AI tools that process personal data — a simple DPIA template takes an afternoon to fill in.
