New joke penned in the toilet back in the day (4,3)
I believe the answer is:
long ago
'back in the day' is the definition.
(I've seen this in another clue)
'new joke penned in the toilet' is the wordplay.
'new' becomes 'n' (abbreviation as in New Testament NT).
'joke' becomes 'gag' (a gag is a joke or witticism).
'penned in' is an insertion indicator.
'the toilet' becomes 'loo' (loo can informally mean a toilet).
'n'+'gag'='ngag'
'ngag' inserted into 'loo' is 'LONG-AGO'.
(Other definitions for long ago that I've seen before include "In times gone by" , "Many moons past" , "Ages back" , "Many years past" , "In the far past" .)