I also have this problem. I stole 20 cattle from a nearby Mercian village and brought them straight to Halfdan but when I talk to him there is no option to give him the herd. There is an option to talk about the quest he has given me, but the only two replies are "I'm still working on it" and "I cannot complete this job".
EDIT: Okay, I think I have found the solution. You have to take the heard directly to Readingum, which I did attempt previously but it didn't work. When I got close to Readingum the quest complete sound triggered and it told me to return to Halfdan.
