Declaring taxed savings to the taxman- Why????

I am filling out my tax credits annual declaration. There is a section called other income where they want to know of any interest paid on taxed savings that amounts to more than £300. We get the standard child allowance but receive no other benefits. Do they want to reduce my child allowance when I have already paid the tax on the interest? Family income is around £38000 excluding around £3500 interest on savings from an inheritance