Microsoft 365 August 2026 Updates: What UK Businesses Need to Know

Microsoft ships hundreds of changes to Microsoft 365 every month, and most of them will never touch how your business actually works day to day. August 2026 is one of the busier months in a while, with a default change to how OneDrive and SharePoint links share files, a shift in how Multi-Factor Authentication can be set up, a hard deadline for retiring Exchange Web Services, and several changes squarely aimed at driving more productivity out of the tools you already pay for.

We’ve gone through Microsoft’s own roadmap and pulled out the changes worth knowing about if you run a UK business on Microsoft 365, grouped by what they actually affect.

Security and Sign-In Get a Passwordless Push

Passkeys Can Now Be Your First MFA Method

Until now, Entra ID required users to register a phone number or set up SMS or voice authentication before they could add a passkey, FIDO2 key, or Windows Hello for Business as their sign-in method. That requirement is being removed. From mid-October through mid-November 2026, users will be able to register a passkey as their very first MFA method, with support for Windows Hello for Business and macOS Platform SSO following from January 2027.

For any business trying to move staff towards phishing-resistant multi-factor authentication, this removes a genuine barrier. Previously, rolling out passkeys meant asking every user to set up a weaker method first, which slowed adoption and left an unnecessary fallback option sitting on every account.

Guest Accounts Get Passkey Support Too

From early October 2026, external users and guests in Entra ID B2B can register and use passkeys issued by the resource tenant. If your business collaborates regularly with external partners, contractors, or clients through shared Microsoft 365 environments, this closes a gap where guest accounts were often left on weaker authentication than internal staff.

Windows Hello for Business and macOS Platform SSO are also being upgraded to count as a complete MFA method on their own, rather than needing a separate passkey registered for step-up checks. That change rolls out through November 2026.

Reducing Accidental Oversharing in OneDrive and SharePoint

A New Default for Shared Links

Microsoft is introducing a redesigned sharing experience built around a single “hero link” per file. The important part is the new default: a shared link on its own will no longer grant access to anyone. Access only applies once specific people are added to the file. This directly targets the classic oversharing risk created by “anyone with the link” URLs being forwarded, copied, or left in old emails. It rolls out from mid-September through late October 2026.

Finding Files That Are Already Overshared

A new report in the SharePoint admin centre, arriving in early to mid-August 2026, shows exactly which files and items are exposed through the legacy “Everyone” and “Everyone except external users” groups, at item level rather than just a site-wide warning. It’s worth being clear about what this does and doesn’t do: it identifies existing exposure, it doesn’t fix it automatically. Anything flagged still needs a human decision about who should actually have access. This is a good moment to have your managed security provider run through the report once it lands in your tenant.

Microsoft Teams: Safer Meetings, Fewer Legacy Features

Reporting Suspicious Activity Mid-Meeting

From early October 2026, participants will be able to report suspicious or fraudulent activity directly from within a Teams meeting, with those reports landing in the admin centre under Protection reports. Alongside this, a new unified dashboard is arriving (late September to mid-October) that gives admins a single view of in-progress and completed meetings and calls organisation-wide, including diagnostics, filtering, and Copilot-assisted analysis.

Mandatory Consent Before Joining

Admins will be able to configure a mandatory consent step, for example a recording notice or responsible AI guidelines, that attendees must acknowledge before joining a meeting. This rolls out from mid-October through mid-November 2026 and is a sensible option for any organisation that needs a clear audit trail of consent for recorded calls.

Two Retirements Worth Flagging

Teams Live Chat stops accepting new customer setups this month, with full retirement in October 2026. Separately, calendar synchronisation between Teams and Google Workspace is also being retired in October 2026. If either is in active use anywhere in your business, particularly Google Calendar sync for any staff on Google Workspace, this is worth checking now rather than finding out when it stops working. Our Microsoft Teams support team can help plan the transition if you rely on either.

Outlook and Exchange: A Deadline You Cannot Ignore

Small Quality-of-Life Changes

Outlook is getting a new filter to quickly locate calendar invitations and event-related messages in the inbox (late August into September), and calendar events can now be rescheduled by dragging them to a new time slot rather than opening each one individually (mid to late August).

Exchange Web Services Retirement Begins This Autumn

This is the one item in this month’s roundup with a genuinely hard deadline. Exchange Web Services (EWS) retirement begins on 1 October 2026, with full retirement on 1 April 2027. Features that currently rely on EWS, including Free/Busy lookups, MailTips, and Calendar Sharing across organisations, are moving to Cross-Tenant Access Policy instead.

If your business shares calendars or free/busy information with another organisation, whether a partner, a parent company, or a client, this needs proactive configuration before the deadline, not a scramble in March 2027. If you’re not sure whether anything in your environment still depends on EWS, our Microsoft 365 consultants can check for you.

Copilot Keeps Evolving

August brought a steady stream of Copilot updates rather than one headline feature. Users can now create shareable links to entire Copilot chat sessions or individual responses within their organisation, and selecting text or a message in Teams can open the Copilot pane with that content already included as context, removing a manual copy-and-paste step. A new effort control lets users pick Light, Medium, or High in the model picker to balance response quality against speed. Self-serve connectors mean users can sync their own external data, such as Jira or Confluence, into Copilot Chat and Microsoft Search using their own credentials, with admins still controlling which connectors are available.

Behind the scenes, Microsoft is also consolidating Copilot into a single app experience across personal and work accounts, arriving on Windows and Mac from mid-September, with a refreshed chat-centred experience in Outlook and Teams following in September. If you’re weighing up how far to take Copilot in your business, this is exactly the kind of thing our secure AI for business team can walk you through.

Admin, Compliance, and Endpoint Management

Clearer Identity Investigations in Defender XDR

A unified identity timeline is rolling out in Defender XDR (mid-September through mid-October), pulling together Entra sign-ins, Microsoft Graph audit events, SaaS activity, and device logons into one normalised view, with better filtering and context for investigating incidents.

Managing Agents Across Multiple Tenants

A new capability in the Microsoft 365 admin centre lets partners and enterprise admins view and manage agents across every tenant they look after from a single portal, currently in public preview and expected to complete rollout by mid-August 2026. For any organisation managing multiple tenants, this is a welcome reduction in admin overhead.

A Genuine Cost-Saving Worth Checking

Business Premium customers who are also licensed for Microsoft 365 Copilot can get 50% off the enhanced data protection features in the Purview Suite, an offer valid through 31 December 2026. If that’s your business, it’s worth checking eligibility before the year is out. Separately, Purview’s adaptive scopes lifecycle controls are changing (mid-October to mid-November) to evaluate only active recipients and site owners by default, with the option to include inactive or soft-deleted users when needed.

Intune: A Deadline for Legacy App Protection

Remote Help now supports unattended sign-in, letting your helpdesk remotely sign into a Windows device using their own credentials without the user present, useful for after-hours support. Device inventory also now includes registry data, so you can verify actual device configuration rather than just what policy says should be applied.

More importantly, support for the legacy “Target to apps on all device types” setting in Intune App Protection ends on 11 January 2027. If you’re still using it, migrate to assignment filters, but don’t remove the old setting until the replacement filter is confirmed working. Removing it too early creates a gap where protection policies simply stop being enforced.

Storage Gets a Boost

Microsoft 365 Business Basic, Standard, and Premium are all gaining an extra 50 GB of primary mailbox storage, taking the total to 100 GB, rolling out between June and September 2026. OneDrive is also getting a rebuilt native sync engine for macOS, improving sync speed and reliability on Apple devices, arriving from early September. If your team is on a mix of Mac and Windows devices, this is worth combining with a wider look at your cloud storage setup to make sure everyone’s backed up properly either way.

What We Recommend

• Start planning your move to Cross-Tenant Access Policy for shared calendars and free/busy now, ahead of the Exchange Web Services deadline, not next spring.
• If you’re on Business Premium with Copilot, check your eligibility for the 50% Purview discount before it ends on 31 December 2026.
• Review the new SharePoint oversharing report as soon as it reaches your tenant. Existing overshared files won’t fix themselves.
• If any devices still rely on the legacy Intune “target to apps on all device types” setting, migrate to assignment filters well before January 2027, and confirm the replacement is working before removing the old one.
• Start moving towards passkeys for MFA if you haven’t already. This rollout removes the old requirement to set up a weaker method first.

Keeping on top of changes like these every month is exactly why most of our managed IT clients don’t have to. If you’d rather have someone else track what Microsoft changes and tell you what actually matters, get in touch with Speedster IT.

Get In Touch, 020 4511 9111

Phone: 020 4511 9111 Email: hello@speedster-it.com

Louise

With over 15 years at Speedster IT, I’ve built a career around helping businesses navigate the evolving world of technology. I publish all the content for the IT Support London Blog and Cyber Security Blog, where I share practical insights on infrastructure upgrades, cybersecurity trends, and smart IT strategies for growing companies.