HMRC has issued the following statement on the Agent Forum at https://online.hmrc.gov.uk/webchatprod/community/posts/list/4937.page:
MTD-compatible software is developed by third party vendors and currently there are no Welsh language options commercially available. Whilst we have actively encouraged software vendors who are developing MTD software to produce Welsh language services, so far none of the vendors whom we’ve approached have developed this offering because of the lack of customer demand. We will continue to encourage software vendors to produce this offering.
Regarding your question on exemption, from the start of the MTD programme, the Government has been clear that businesses which genuinely cannot operate MTD will not be required to do so. Customers can apply for an exemption from MTD if they feel the lack of Welsh software means they cannot join MTD and we’ll consider their application. Customers can apply for an exemption by calling 0300 200 3700, or writing to us at, HM Revenue and Customs - VAT Written Enquiries Team, Portcullis House, 21 India Street, Glasgow G2 4PZ. Further information on MTD exemptions is available online here