Flogging papers in Mercury houses (6)
I believe the answer is:
hiding
'flogging' is the definition.
'papers in mercury houses' is the wordplay.
'papers' becomes 'id' (identification papers).
'mercury' becomes 'hg' ('Hg' can be a synonym of 'mercury').
'houses' indicates putting letters inside.
'id'+'in'='idin'
'idin' put within 'hg' is 'HIDING'.
(Other definitions for hiding that I've seen before include "Secreting" , "physical punishment" , "Concealment - punishment" , "corporal punishment" , "Keeping secret" .)