Done a bit more digging before bed, and first, I found this about actually importing the car from the IoM which would imply it can't stay here indefinitely on Manx plates.
http://www.dft.gov.uk/pgr/roads/vehi...man4559?page=2

A bit more digging finds the IoM website from which I have to say that the hardest part of this scheme could be getting an IoM address because you need to live there for 10 years before you even qualify for a council house, and they don't seem wild about people moving there to take up jobs that a local could fill.
http://www.gov.im/isleofman/residency.xml
http://www.gov.im/isleofman/Employment.xml

Their tax disc rates are on page 3 of this.
http://www.gov.im/lib/docs/post/vl1200910.pdf

And page 2 of this shows their first registration fee is only £9.00!!!
http://www.gov.im/lib/docs/post/mvr5.pdf

I've also learned that if a Manx imports a UK car permanently, it needs to be re-registered at the earliest opportunity and needs an IoM inspection if it is over 3 years old, even though they don't have a periodic inspection like our MoT. A temporary import can last for a maximum of 12 months.
http://www.gov.im/transport/highways...gistration.xml

Then, surfing on from there I found a bit about IoM students bringing their car to the UK and that shows clearly that an IOM car can only be used in the UK for 12 months - then it has to go home for a visit. During the time it is here it has to be correctly registered, taxed and insured in the IoM - including insurance cover for use in the UK. Beyond a 12 month stay the student should apply for an exemption from our Revenue & Customs too.
http://www.gov.im/lib/docs/highways/...9060411190.pdf

So, between the need for an address and taking the car back to the IoM every year I doubt it is worthwhile for the saving on offer.