An impact tool comprising: a housing; a motor disposed in the housing; an output spindle; an impact mechanism coupled to the output spindle and configured to be driven by the motor, the impact mechanism configured to operate in one of a rotary mode in which the impact mechanism transmits rotational motion to the output spindle without rotational impacts and an impacting mode in which the impact mechanism transmits rotational impacts to the output spindle, wherein the impact mechanism is configured to transition from operating in the rotary mode to operating in the impacting mode when a torque on the output spindle exceeds a transition torque; and a controller configured to control power or current being delivered to the motor wherein the controller is operable in one of: (a) a normal mode where the controller allows power or current to be delivered to the motor so that the impact mechanism transitions from operation in the rotary mode to operation in the impacting mode when an output torque exceeds a normal transition torque; and (b) a control mode where the controller controls power or current being delivered to the motor so that the impact mechanism transitions from operation in the rotary mode to operation in the impacting mode when an output torque exceeds a control transition torque that is greater than the normal transition torque; characterised in that, in the control mode, the controller limits the power or current delivered to the motor to not exceed a respective first power limit or first current limit until a first predetermined time period after the controller determines that a tool parameter has reached a first threshold, wherein said first predetermined time period occurs after said power or current reaches said respective first power limit or first current limit, and then allows an amount of power or current delivered to the motor to exceed the respective first power limit or first current limit, wherein the first power limit or first current limit corresponds to a first output torque that is lower than the normal transition torque. a housing; a motor disposed in the housing; an output spindle; an impact mechanism coupled to the output spindle and configured to be driven by the motor, the impact mechanism configured to operate in one of a rotary mode in which the impact mechanism transmits rotational motion to the output spindle without rotational impacts and an impacting mode in which the impact mechanism transmits rotational impacts to the output spindle, wherein the impact mechanism is configured to transition from operating in the rotary mode to operating in the impacting mode when a torque on the output spindle exceeds a transition torque; and a controller configured to control power or current being delivered to the motor wherein the controller is operable in one of: (a) a normal mode where the controller allows power or current to be delivered to the motor so that the impact mechanism transitions from operation in the rotary mode to operation in the impacting mode when an output torque exceeds a normal transition torque; and (b) a control mode where the controller controls power or current being delivered to the motor so that the impact mechanism transitions from operation in the rotary mode to operation in the impacting mode when an output torque exceeds a control transition torque that is greater than the normal transition torque; characterised in that, in the control mode, the controller limits the power or current delivered to the motor to not exceed a respective first power limit or first current limit until a first predetermined time period after the controller determines that a tool parameter has reached a first threshold, wherein said first predetermined time period occurs after said power or current reaches said respective first power limit or first current limit, and then allows an amount of power or current delivered to the motor to exceed the respective first power limit or first current limit, wherein the first power limit or first current limit corresponds to a first output torque that is lower than the normal transition torque.