Use tax cut by empty Exchequer (8)
I believe the answer is:
exercise
'use' is the definition.
('exercise' can be a synonym of 'use')
'tax cut by empty exchequer' is the wordplay.
'tax' becomes 'excise' (excise is a kind of tax**).
'cut by' is an insertion indicator.
'empty' suggests removing the centre.
'exchequer' with its centre taken out is 'er'.
'excise' going around 'er' is 'EXERCISE'.
(Other definitions for exercise that I've seen before include "Workout" , "keep physically fit" , "problem" , "Do it to get fit" , "Task performed to develop skill" .)