Skinhead breaks rules, gives up (7)
I believe the answer is:
resigns
'gives up' is the definition.
('resign' can be a synonym of 'give up')
'skinhead breaks rules' is the wordplay.
'skinhead' becomes 's' (head letter of 'skin').
'breaks' is an insertion indicator.
'rules' becomes 'reigns' (reign is a kind of rule).
's' going into 'reigns' is 'RESIGNS'.
(Other definitions for resigns that I've seen before include "does the honourable thing" , "abdicates" , "Gives up (a post)" , "Leaves job voluntarily" .)