While you don't technically do not need to include the kids' UK passports, I would do so anyway. I hired an immigration advisor for my visa application and she had me do this very thing. (well, copies of the UK passports along with copies of their birth certificates) Now whether or not the fact that my kids and husband were in the UK while I applied was the reason for this, I don't know. It can't hurt your application whatsoever and will only strengthen it, imo.