It's gruesome seeing horse go round taxi (7)
I believe the answer is:
macabre
'it's gruesome' is the definition.
(both can mean morbid or disturbing)
'horse go round taxi' is the wordplay.
'horse' becomes 'mare' (mare is a kind of horse).
'go round' indicates putting letters inside.
'taxi' becomes 'cab' (synonyms).
'mare' enclosing 'cab' is 'MACABRE'.
'seeing' acts as a link.
(Other definitions for macabre that I've seen before include "Dark and disturbing" , "Chilling" , "Grotesque" , "Ghastly, gruesome" , "'Grim, repellent (7)'" .)