Here is the short answer. Business Basic is for staff who only need email and the web versions of Office. Business Standard adds the full desktop apps - Outlook, Word, Excel and the rest installed on the PC. Business Premium adds the security and device management tools that genuinely protect a business. Our honest recommendation for most UK SMEs is simple: put everyone on Premium. The cheaper plans save a few pounds a month but leave security gaps that cost far more to deal with later.
You will read plenty of advice that says to mix the plans and put each person on the cheapest tier they can get away with. We steer clients away from that, for reasons we will come to. First, here is what actually separates the three plans, so the recommendation makes sense.
Approximate UK pricing
Prices are per user, per month, on an annual commitment and exclude VAT. Treat these as a guide and check the current figures on Microsoft's own site before you buy or renew, because the rates are changing this summer.
Business Basic - around £4.60 (rising to about £5.75 from 1 July 2026)
Business Standard - around £9.90 (rising to about £11.55)
Business Premium - around £16.90 (rising to about £18.10)
Two things on timing. Microsoft is raising commercial pricing from 1 July 2026, so sign-ups and renewals on or after that date pay the higher rates. And paying month to month with no annual commitment costs roughly 20% more than the annual price, which adds up fast across a team.
The two decisions that actually matter
Ignore the long feature matrices for a moment. There are really only two questions to answer, and they sit at the boundaries between the three plans.
Basic to Standard: do you need Office installed on the PC?
Every plan includes business email with a 50GB mailbox, Teams, OneDrive, SharePoint and the browser versions of Word, Excel and PowerPoint. Moving up to Standard buys you the proper desktop apps installed on Windows and Mac, the full desktop Outlook, and the right to run Office on up to five devices per person.
In practice, anyone who builds spreadsheets, works offline, handles large documents or lives in Outlook all day wants Standard. Someone who only checks email and opens the odd shared file can sit on Basic. The web apps are capable, but they aren't a like-for-like replacement once the work gets heavier.
Standard to Premium: do you need to secure and manage devices?
This is the bigger step, and it's the one most businesses underestimate. Standard and Premium include the exact same Office apps. You're not paying the extra few pounds for a better Word. You're paying for security and central control, and that is where Premium earns its place.
What Premium adds that makes a difference
Premium bundles a set of protection and management tools you'd otherwise have to buy and bolt on separately. The ones that matter most for a UK SME:
Microsoft Defender for Business - proper endpoint protection (antivirus plus EDR-style detection) across Windows, Mac, iOS and Android, managed centrally rather than left to each laptop.
Microsoft Intune - device management, so you can enforce encryption and screen locks, push settings, and remotely wipe a lost or stolen laptop or phone before data walks out the door.
Entra ID P1 - the identity tier that unlocks the controls below and tightens how people sign in.
Conditional Access - rules such as "block sign-ins from outside the UK" or "only allow access from a managed, compliant device". One of the highest-value controls you can switch on.
Self-service password reset and stronger email threat protection - fewer support calls, and better defence against the phishing and impersonation attacks that target finance teams.
We've covered the full Premium feature set, and why we put most clients on it, in our Understanding Microsoft 365 Business Premium guide, so there's no need to repeat all of it here.
One honest caveat. The risk-based sign-in policies that react automatically to a suspicious login need Entra ID P2, a separate add-on. The P1 included with Premium covers the controls the vast majority of businesses actually need.
Why we put everyone on Premium
A lot of advice online tells you to save money by putting your directors and finance team on Premium and leaving everyone else on Standard or Basic. We don't do that, and we'd steer you away from it. The reason is about security, not sales.
Business Standard and Business Basic do not include Entra ID P1 or Defender for Office 365 - the two parts of Premium doing the heavy lifting on Conditional Access and email threat protection. The moment you split your team, everyone not on Premium sits outside your sign-in rules and anti-phishing controls. That is a real gap, and it is usually the cheaper accounts - the shared mailbox, the frontline worker, the new starter - that an attacker goes after first.
You can buy Entra ID P1 and Defender for Office 365 as standalone add-ons to close that gap, but once you have, the saving against simply giving that person Premium is almost nothing. You have taken on extra admin and a patchwork of licences to save a pound or two per user. It isn't worth it.
Security isn't something only the directors need. A break-in through a junior account does just as much damage as one through the finance director's, and attackers know the quieter accounts are often the softer target. So unless someone genuinely only checks email from a browser and never touches company data, they belong on Premium like everyone else. That is how we set up the vast majority of the businesses we look after, and it is the right call far more often than not.
Regulated sectors: start at Premium
If you're a solicitor, accountant, financial adviser, healthcare or care provider, or anyone handling large volumes of personal data, treat Premium as your baseline rather than an upgrade. The device management, conditional access and audit capabilities map directly onto what regulators expect.
Under UK GDPR and the Data Protection Act 2018 you have to take "appropriate technical and organisational measures" to protect personal data, and if something goes wrong the ICO will look at whether you actually did. The same applies if you answer to the SRA, the FCA, or the NHS Data Security and Protection Toolkit. Premium gives you concrete, demonstrable controls - encrypted, managed devices and the ability to wipe a lost one - which is exactly the kind of evidence those frameworks want to see.
How it maps to Cyber Essentials
If you're working towards Cyber Essentials (and most UK SMEs should be, especially to win public-sector or larger contracts), Premium makes certification noticeably easier. The scheme's five controls - firewalls, secure configuration, security update management, user access control and malware protection - line up well with what Premium gives you out of the box.
Defender covers malware protection, Intune handles secure configuration and patching across your devices, and Conditional Access plus MFA tighten access control. You can still certify on the cheaper plans, but you'll spend more time assembling and proving the same controls by hand.
A quick way to decide
Almost everyone - anyone who handles email, documents, client information or money, or signs in from a laptop or phone - belongs on Premium. For most businesses that is the whole team, and it's where we'd start.
Standard only makes sense for someone who needs the installed desktop apps but genuinely never touches sensitive data, and even then they lose the security and device controls Premium brings.
Basic is for the narrow case of a deskless or occasional user who only needs email and the web apps.
Most businesses we work with around Berkshire end up putting their whole team on Premium, simply because the security gap between Standard and Premium matters far more than the few pounds a month it costs to close it.
If you're weighing up a renewal or trying to get your Microsoft 365 licensing right, we're happy to look at how your team actually works and make sure everyone is properly covered. It usually takes one short conversation to sort out.