This is the reply I got after sending the IHS reference number. IMO this is ridiculous. It's not a small amount of money to come up with.
'Hello,
There is currently an error on the portal which is marking these applications as IHS exempt but that under the immigration rules, children applying under Appendix FM are liable to pay the IHS charge. You shall receive an email requesting the IHS payment, please use the link to make the payment.
Regards,
IHS Team
Sheffield.'
They also waited until the very last day I was supposed to provide the payment the first time to tell me this! I could have had it paid and possibly gotten our visas back by now.