Agency and IR35 implications

My technical knowledge on IR35 is not great and I do not fully understand implications of the following;

A potential new client is a sub contractor, involved in street lighting on new builds, and has a contract for services with an agency , who pays my client a gross weekly wage ( no tax or NI deductions), based on his timesheet, less their admin fee for payroll and PL insurance fee.  The agency's client is a UK company, who has many contracts for street lighting, and my client will be working for them for the next few years.  The written contract, with the agency, is a contract for services and includes all the usual IR35 clauses e.g. substitution clause.  My client has also signed a declaration form, with the agency, to say he meets the criteria of IR56 i.e. a self employed status declaration.  The blurb from the street lighting company says that 'The agency is CIS compliant which enables sub contractors to work for long term periods rather than the 6 months usually allowed to those paying tax through CIS'.

Firstly does the above indicate that the contract falls outside of IR35?

Secondly my potential client says some of his colleagues have set of Ltd companies to save tax. I want to say yes go ahead, set up a company, you will save around £5,000 in NI, but I do not fully understand  the IR35 implications.  If the above does indicate the contract falls outisde of IR35 then is it ok to advise to set up a limited cmpany as the agency is doing as much as possible to ensure the contract is outside the scope of IR35?

Secondly should the Revenue investigate and determine the contract is within IR35, who might get stung for extra tax and NI, if a) he remains as sole trader or B) he sets up his own limited company.

Thirdly a question on the deemed payment, is any corporation tax paid through a limited company credited towards any additional PAYE and NI due on a deemed payment or is CT paid irrelevant?

Fourthly, there is a declaration to opt out of the conduct regulations 2003. I have no idea on the implications of this ?

Any advice to point me in the right direction greatly appreciated.