Care by a relative is not considered to be care by a childminder - so relatives do not need to be registered to provide care. In turn, the parents can't use Tax Credits or Childcare Vouchers, as care isn't provided by someone registered/approved.
If it was care for a child who was unrelated to the carer, then 2 hours or more (on 6 or more occasions in a year) would require registration.
If you want legislation:
Refer to PART XA (Care Standards Act 2000)
79A(3)A person who?
(a) is the parent, or a relative, of a child;
(b) has parental responsibility for a child;
(c) is a local authority foster parent in relation to a child;
(d) is a foster parent with whom a child has been placed by a voluntary organisation; or
(e) fosters a child privately,
does not act as a child minder when looking after that child.