As far as I know, indoor prostitution is as legal on the IoM as it is here, and tax evasion is just as illegal.
What you will need to do is be
incredibly discreet and I would strongly advise against working from home (as if you didn't know that already
). I would suggest registering as a therapist (or similar) just as many ladies do here. There are lots of posts about tax and suchlike on the forum, although it would certainly be worth consulting the IoM tax office too - you can be a mobile masseuse or nail technician or whatever you like, and quiz them a bit.