If they are adamant they don't want the daughter to get into trouble they may have difficulty doing anything, because what she has been doing is almost certainly fraud.
If they claim Tax Credits they will be asked for the Child Benefit details. What they ought to do is claim the Child Benefit and Tax Credits at the same time. There will be a delay while the daughter is contacted about her entitlement to Child Benefit, but when it is resolved the benefits should be backdated. They could avoid the risk of the daughter getting into trouble if they pretend the change of care to them has only recently taken place. However, this involves getting the duaghter to co-operate. They should tell the daughter in no uncertain terms that the ARE going to do this and that if she does not co-operate ther fact that she has been milking the system for years will almost certainly come out, with adverse consequences for her. If she has an iota of commonsense, she will then co-operate.